Vol. 46, No. 2
Introduction to the Special Topic Forum on Global Supply Chain Management
This issue of the Journal is devoted to the Special Topic Forum on Global Supply Chain Management.
Edited by Barbara B. Flynn, D.B.A. Barbara B. Flynn, D.B.A., the Richard M. and Myra Louis Buskirk Professor of Manufacturing Management at Indiana University, Indianapolis, Indiana.
A Process Analysis of Global Trade Management: An Inductive Approach (invited paper)
This paper describes a new, detailed process model for Global Trade Management (GTM) that contains sufficient detail on cross-border trade processes to estimate the benefits of Information Technology-Enabled Global Trade Management (IT-GTM). Our methodology combines a grounded theory approach with data analysis and analytical modeling. GTM describes the processes required to support cross-border transactions between importers, exporters, their trading partners and governments. IT-GTM is the set of information technologies and software solutions that can be used by companies to carry out their global trading processes in a streamlined manner. We collect data on time reductions for individual trade process steps using IT-GTM and use critical path analysis to calculate the resulting improvements in key metrics such as the manufacture-to-invoice cycle and days-sales outstanding for exporters, and the order-to-receipt cycle for importers. Under reasonably conservative scenarios, the gross savings from IT-GTM amount to 1.7 percent and 0.6 percent of annual sales for exporters and importers, respectively.
Warren Hausman, Ph.D. Warren Hausman, Ph.D., is a Professor in the Department of Management Science and Engineering at Stanford University, Palo Alto, California,
Hau Lee, Ph.D. Hau Lee, Ph.D., is the Thomas Professor of Operations, Information and Technology at the Graduate School of Business at Stanford University, Palo Alto, California,
Graham Napier, M.B.A. Graham Napier, M.B.A., is Vice-Chairman of TradeBeam, Inc., San Mateo, California,
Alex Thompson, M.B.A. Alex Thompson, M.B.A., is the Chief Architect/Vice President of Market Strategy for TradeBeam, Inc., San Mateo, California
Yanchong "Karen" Zheng Yanchong "Karen" Zheng is a Ph.D. candidate at Stanford University, Palo Alto, California.
Angles of Integration: An Empirical Analysis of the Alignment of Internet-Based Information Technology and Global Supply Chain Management
This paper examines the relationship between the focus and implementation degree of Internet-based information technology (IT) applications and the scope and orientation of process-oriented integration in global supply chains. Using data from 205 plants, which were collected in conjunction with the High Performance Manufacturing project, the degree of supplier and customer integration and its match with the implemented IT instruments supporting inter-organizational collaboration are investigated empirically. Different types of integration are differentiated from each other with the help of factor, percentile and cluster analyses. The focus and degree of IT integration is measured for each of the resulting groups and the alignment of both aspects is analyzed with the help of an approach referred to as the "angles of integration". With respect to supply chain integration and IT implementation, the analysis of different integration strategies shows that most of the plants do not align their IT implementation with their supply chain strategy. The paper helps companies to evaluate the alignment of their use of IT techniques with their global supply chain management emphases. Additionally, possible reasons for a potential mismatch of functional strategies are discussed, giving managers insights for dealing more effectively with a strategic alignment. Furthermore, the paper refines an existing framework for the comparison of different supply chain integration strategies and applies it with IT. Based on the angles of integration, the match of supply chain integration and IT is investigated by statistical analyses.
Jorn-Henrik Thun. Ph.D. Jorn-Henrik Thun. Ph.D., is an Associate Professor at the Mannheim Business School at Mannheim University (Germany).
Sustainable Global Supplier Management: The Role of Dynamic Capabilities in Achieving Competitive Advantage
Organizations face increased pressure from stakeholders to incorporate a plethora of corporate responsibility (CR) and sustainability aspects in their business practices. Legal and extra-legal demands are dynamically changing; almost no organizational function is unaffected. Owing to the outsourcing wave of the last decade, in particular, purchasing and supply management (PSM) plays an ever more important role in assuring sustainable production of the firm's products offered in the marketplace. The supply base of many Western firms has become increasingly global and spend volumes have shifted towards emerging countries. In order to avoid the risk of reputational damage to the buying company, the PSM department must ensure that their international suppliers comply with their corporate codes of conduct, and that environmental and social misconduct at supplier premises does not occur. In this paper, "sustainability" refers to the pursuit of the tripartite of economic, environmental and social performance. We contribute to prior research in the fields of sustainability and CR by extending insights of the dynamic capabilities view to analyze how the PSM function integrates sustainability aspects in its global supplier management processes. Based on four case studies in the chemical industry, we propose that profound sustainable global supplier management (SGSM) capabilities are a source of competitive advantage. These capabilities are path-dependent and particularly valuable when organizations are receptive to external stakeholder pressure. Early movers in the field of SGSM reap competitive benefits to a notable extent as a result of resource accumulation and learning processes over time.
Carsten Reuter, Dipl.-Kfm. Carsten Reuter, Dipl.-Kfm., is a Ph.D. candidate at the European Business School in Wiesbaden (Germany),
Kai Foerstl, Dipl.-Kfm. Kai Foerstl, Dipl.-Kfm., is a Ph.D. candidate and research assistant at the European Business School,Wiesbaden (Germany),
Evi Hartmann, Dr. Ing. Evi Hartmann, Dr. Ing., is Professor of Logistics at the Friedrich-Alexander University, Erlangen-Nuernberg (Germany)
Constantin Blome, Ph.D. Constantin Blome, Ph.D., is Assistant Professor for Sourcing in Emerging Markets at the European Business School, Oestrich-Winkel (Germany).
A Four-Filter Method for Outsourcing to Low-Cost Countries
Many companies face the challenge of outsourcing to low-cost countries. Still, many managers seem to be uncertain about (1) which inputs should be selected for this exercise; (2) which countries are preferred; and (3) whether to deal directly with suppliers, or through a local distributor or agent. This paper deals with these three aspects in offering a practical and tested method, derived from theory. In each of four steps, inputs are filtered out that are less suitable for sourcing from low-cost countries. Step 1 clusters all of the hundreds of inputs into 50-90 product families. A portfolio analysis of the resulting product families in Step 2 enables differentiation in the nature of goods and services acquired and their supplier relationship characteristics. In this step, unique products and low-volume, low-value inputs are filtered out. In Step 3, managers score the remaining product families on operationalized process and product characteristics. Based on these scores, product families are assigned to four categories: (1) "Global Sourcing" or direct off-shoring; (2) "Source Global, Buy Local" or indirect off-shoring — for example, produced in China but bought through a local agent/distributor; (3) "Buy Regional", or near-shoring; and (4) "Vicinity Buying". Step 4 compares the present total costs of product families with the potential total costs after a switch toward the proposed areas. A case study revealed a significant potential for reduction in total costs for selected product families. In practice, the method serves three ends: (1) it clarifies the various product and process characteristics that are perceived as important by the stakeholders involved; (2) it guides the selection process of potential product families and potential areas in a structured way; and (3) it makes visible the financial results of alternatives to the present way of sourcing.
Dirk-Jan Kamann, Ph.D. Dirk-Jan Kamann, Ph.D., is a Professor of Supply Chain Management and a member of the Faculty of Economics and Business at the University of Groningen (The Netherlands)
Vincent van Nieulande, M.S. Vincent van Nieulande, M.S., is a procurement analyst at ASML (The Netherlands).