Increasing competition forces companies to find the most beneficial way to manufacture their products for a global market. Most relocations of manufacturing have been justified mainly due to reduction of cost. The manufacturing industry is therefore facing a trend of localization of manufacturing in low cost countries, mainly Asia and Eastern Europe. Previous examples have been the ship building industry and the textile industry, when manufacturing almost disappeared from Europe and North America. The choice of localization is however more complex than to be based on cost solely, even though everything in one or another way can be translated into cost or income. Non-financial issues are difficult to estimate, but important to handle in order to attain a more holistic approach.
This paper presents an illustrative and holistic framework for making decisions on locating manufacturing in relation to the market and suppliers, linked to cost and competence.