Global Supply Chain Design : Exploring configurational and coordination factors

Abstract:

This thesis addresses the topic of global supply chain design. One major challenge concerns how to manage the tension between separation and integration pertaining to the localization of business activities. In this regard Ferdows (2008) worked to create two new production network models (rooted production network and footloose production network). Earlier studies have highlighted the choices that are involved in the network of facilities but lack in providing a comprehensive picture in terms of both configurational and coordination factors that govern the design of global supply chain. There is a need for a conceptual model where factors affecting the design process of a global supply chain can be applied. Two main research questions have been addressed in this study. First, exploring and identifying the factors affecting global supply chain design. Second,investigating the factors that influence the position on the spectrum of rooted and footloose supply chain design.      

A literature review analysis and multi-case studies have been performed for this study in order to explore the factors. The companies were selected in order to reflect upon the two types of network, i.e., rooted and footloose. The primary data were selected through interviews with the managers.

This study highlighted that there are many factors that affect configurational and coordination decision areas within a global supply chain. This study categorized the factors and the configurational/coordination decision areas with two main competitive priorities, i.e., cost and differentiation in the form of a “conceptual model.” The study also highlighted the factors in a matrix, which showed their position on the spectrum of rooted and footloose network configurations. For instance, the coordination factors that drive towards a footloose network include: high orchestration capabilities, need access to new technology and knowledge, proximity to suppliers, etc. The configurational factors that drive towards a rooted network include: economic stability, proximity to market, concerns for sustainability issues, high transportation cost, need for high proximity between key functions, need for intellectual property rights protection,etc.