Management of Critical Lower-Tier Suppliers in Global Networks: Practical Relevance, Literature Review, and Management Perspectives

Abstract

Global supply networks have grown as a result of decades of intensive, strategic outsourcing to firms located in eastern countries. The initially linear supply chains have transformed over time into complex, extensive supply network structures with numerous lower-tier suppliers located all over the world. The recent COVID-19 pandemic has caused bottlenecks in these global supply chains, presenting company supply managers who are responsible for sourcing with enormous challenges. Firms face high risks due to the low levels of transparency and asymmetric divisions of power in their global supply chains, risks that are only heightened by the recent COVID-19 crisis. In this article, we address this issue by describing the characteristics of critical lower-tier suppliers (CLTS) in practice and scientific literature. The results of this review may serve as an initial framework, guiding researchers in the future as they develop a research model that can be used to explain the success factors of CLTS management in global network structures. Finally, based on these literature review results, this article provides an overview of perspectives and trends in the management of CLTS in the post-COVID-19 business world.