Product Architecture and Supply Chain Management Design in Emerging Markets: A Case Study of Japanese Firms in Brazil

Abstract

No firm can control all areas of their supply chain. Product architecture is a crucial element of value analysis in supply chain management (SCM). In this article, we explore the following research questions: (1) What is the relationship between product architecture and SCM practices? (2) How can we apply this framework to business practices? To analyze our research topics, we will show a framework for relationship of product architecture and sourcing. To make our specific framework applicable to firms, we do case studies of Japanese firms in Brazil, comparing with Korean electronic firms in Brazil. This paper mainly examines the case of Japanese firms in Brazil from the standpoint of product architecture and SCM. With a relatively weak Brazilian domestic supplier network, not all component parts can be deployed there. Global supply chain management is useful for cost reduction for certain raw materials. Technologically, some parts need to be procured from outside of Japan. In particular, many component parts for motorcycle manufacturers require integral architecture in contrast to electronics products. Firm H is successful in SCM integration through helping Japanese suppliers relating to integral architecture to move into Brazil and at the same time raising the internal production ratio. Lessons and implications are briefly discussed.