International location selection for production fragmentation

•International production fragmentation plays an important role as a strategic advantage for companies.•Location selection is a strategic issue that has an impact on the company’s income and success.•Selection of the most suitable location is an important multi-criteria decision-making (MCDM) problem.•Potential locations are ranked based on their overall performance by using fuzzy TOPSIS.•Uncertainty of human decision-making is considered through a fuzzy concept in a fuzzy environment. Today, many companies do not restrict their manufacturing activities to their home countries and are increasingly seeking new locations from which to operate cross-border production sharing. The location decisions involved in production fragmentation represent a strategic issue that has a significant impact on a company’s income and success. The location selection process considers many criteria, especially when the process involves international locations. Most criteria are difficult to assess precisely and quantitatively, and a rating scale may need to be employed. However, such scales, which are often based on linguistic variables, are not typically standardized across various decision-makers, making them dependent upon subjective judgments. To tackle such complications, fuzzy logic is adopted to reduce the uncertainties in group decision-making in such an environment. The purpose of this paper is to applya fuzzy technique for order preference by similarity to ideal solution (fuzzy TOPSIS) regarding the locations to be used in the international production fragmentation of an electronics company located in Thailand. This paper first examines the important criteria influencing location decisions for international production fragmentation. Fuzzy set theory is then applied to manipulate linguistic vagueness, ambiguities, and imprecise information and knowledge in such a manner as to determine weights for multiple criteria. The significant criteria for international production fragmentation are then identified and ranked through expert judgments. The results reveal that skill and competency level of labor force, adequacy of energy and electricity, and taxation and tax incentives are the most important criteria. The potential locations are finally ranked based on their overall performances. The paper also provides implications for management practices in international operations in terms of critical location criteria, decision-making methods, and uncertain situations.