Table of ContentsPoor Public RelationsCultural and Language BarrierFinancial LossTheft or Misuse of Intellectual PropertyCultural and Language BarrierLonger Order CyclesThe overseas manufacturing option is primarily intended to reduce manufacturing costs components while maintaining research, development and design in New Zealand. The idea behind overseas manufacturing is to either outsource the work or create a partnership with a foreign manufacturer while still maintaining control of the product. The company can even opt for another option: becoming owner of the factory as it grows. For this report, the raw material chosen is wool. The process of shearing wool, importing and processing in Mauritius and re-exporting to New Zealand was described using a flowchart. The ten major risks and their justifications have been identified. Treatment options to reduce these risks were also considered. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get an original essayThe wool of sheep is normally sheared once or twice a year. This represents around 220,000 tonnes of wool per year. Wool is then classified based on its properties such as fiber diameter, length, tensile strength, color, volume, fiber medullation (whether hollow or centered) and the presence of material plant. This will determine whether the wool is suitable for making soft fabrics, rugs, blankets, upholstery or curtains. The best quality of wool comes from the shoulders and sides of the sheep, while the lowest quality comes from the legs (How the Products Are Made, n.d.). The wool must then be washed to remove all sand, dirt, plant matter, manure, grease and dry sweat in a process called scouring. The wool should also be tested for any insecticide that may still be present due to spraying on the sheep. These must respect minimum internationally acceptable levels (Te Ara, nd). Around 70% of the wool is then packaged and transported to the relevant port for shipment overseas via containers. Some relevant documents when exporting to Mauritius are invoice to prove the transaction between the importer and exporter, packing list to declare inventory, invoice of entry which is a formal declaration of the goods entering into the country and a certificate of origin attesting the origin. goods (Mauritius Chamber of Commerce and Industry, 2018). If these prove satisfactory, only the goods can be cleared and transported to the factory (Mauritius Trade Easy, nd). At the factory, the wool will be processed by going through combing to separate the strands. This process also helps remove small particles of plant matter, seeds and leaves. It then undergoes spinning in which the wool yarn is taken, twisted and stretched into a finer entity, then wound onto a bundle at high speed to form a yarn which is collected onto wooden spools. Weaving is used to make clothing, rugs, or upholstery, while knitting is used to make clothing (Wood, n.d.). After these processes, the fabric will need to be immersed in water to ensure interlocking of the fabrics, followed by crabbing to secure the interlock, then treated to prevent shrinkage and finally dyeing (Blackberry Ridge, n.d.). Quality control is then carried out by sight, touch and measurement. All loose threads areremoved and the knots are pushed back into the fabric. All minor defects are corrected before undergoing finishing procedures (How Products Are Made, nd). All clothing must carry care labels in accordance with AS/NZS 1957:1998 Textiles – Care Labeling, whether the product was manufactured in New Zealand or overseas. It must indicate care instructions, country of origin, fiber content and children's sleepwear must carry a fire hazard label (Commerce Commission New Zealand, 2018). The clothes are then individually packaged and sealed and transported to the port where it will be sent to New Zealand in containers by ship. After analyzing the processes and their description, some major risks were identified and presented in the table below. Risks were identified from the perspective of the manufacturer (based in Mauritius) and the distributor (brand owner based in New Zealand) and some risks were found to be relevant to both the manufacturer and the distributor. The impacts of these risks were also described. These risks were deemed major based on their consequence and likelihood scores in Section 4 – Risk Assessment. Loss of control over product manufacturing. Control over production processes is not at the same level as when it comes to domestic installations. End Product Quality Control – Fabrics and Apparel Consistency in product quality can be difficult to achieve, especially if the products are manufactured in a location where the workforce is untrained or migrant labor ( Coakley, 2013). Theft or misuse of intellectual property Since the wool will be made into fabrics and clothing overseas, there is a risk that the designs will be stolen if they are disclosed without authorization (New Zealand Trade & Enterprise, nd). Bad public relations The company could get a negative result. public image of sending raw materials to be processed in a foreign country instead of giving work to national workers. This can lead to a negative public image (Hamel, nd). Failure to comply with environmental regulations It is primarily the responsibility of the brand owner to ensure that all environmental regulations are complied with. Failure to do so reflects poorly on the company for failing to perform due diligence on supply chain partners. This can lead to loss of business opportunities (Arena, 2008). Exchange Rate Fluctuations Conversion changes may affect gains or losses. Cultural and language barrier Being in an offshore partnership means navigating cultural gaps. To be able to do business, it is necessary to understand the preferences of both countries (Coakley, 2013). Language can be a problem, especially if technical issues need to be discussed. There may be confusion about quantities and deadlines. This can affect negotiations and create communication delays. Relational difficulties with the business partner. Disputes between supplier, manufacturer and distributor. Loss or damage to goods during transport Products may be at risk of theft at all stages of the export process, including during shipping and transport to market (New Zealand Trade & Enterprise, nd). Financial losses Longer order cycles Due to the fact that the manufacturer is remote, additional time is required for transportation. Delays of several months are necessary (Coakley, 2013). In this case, Mauritius is a country prone to cyclones which can also play a major role.