Canadian-based hockey stick manufacturer Sher-Wood is deciding to uproot its production process and relocate to China in pursuit of its competitors. The rationale behind this decision stems from cheaper production and labour costs reducing the overall cost for Sher-Wood to manufacture its carbon composite sticks. The process of moving its facilities has slowly been progressing over the past few years. What once was an entirely Canadian company now only has 15 of its production process done in their home province of Quebec.
The decision for Sher-Wood to move its location isn’t really a surprising one as many companies that have manufacturing and production needs have been moving overseas for decades. Its simply due to the fact that producing overseas yields an equally valuable product for a much cheaper cost. From a managerial accounting point of view, this decision would be under analysis for directing and positioning under planning. Personally I think it’s a very logical decision for Sher-Wood to make in order to stay relevant and competitive.