Coloplast A/S – Organizational Challenges in Offshoring

Case Solution

Torben Pedersen, Jacob Pyndt, Bo Nielsen
Ivey Publishing ()

Coloplast’s future global manufacturing strategy was based on relocating the production volume of mature product lines to low-wage countries such as Hungary and China, while most of the creative and innovative activities (pilot production, acceleration and maintenance of product range) were carried out in Denmark. The large-scale offshoring project, initially mass production and then possibly other activities, to Tatabanya, Hungary, represented a significant change in Coloplast’s operational strategy, resulting in a number of organizational and business challenges. A key feature of the case is the surprise to the management team at how difficult it was to globalize operations despite Coloplast’s international experience with a network of subsidiaries in more than 26 countries. The management team has learned the importance of having the structure, organization and mindset when offshoring production. Obviously, international sourcing is very different from international sales in that it encompasses the entire organization. In this case, the learning process of the management team and the challenges it faced are unfolded.

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