Supply strategies for build‐to‐order: managing global auto operations

Abstract

PurposeVehicle manufacturer “CarCo” has spent decades developing its supply strategy based on customer ordered production. Yet the combination of an over‐crowded European market and the need to grow sales poses a dilemma: what strategy does it adopt to manage its global operations? This research aims to examine the implementation of responsive operations and supply strategy to analyse how and why a firm's strategy changes over time.Design/methodology/approachBased on the observations from a two‐day workshop held for 50 managers at the firm's headquarters, the paper explores theoretical and practitioner implications for the continued development and implementation of build‐to‐order (BTO) as a cornerstone of supply strategy.FindingsDespite considerable capability at functional and business level, CarCo must address corporate and industry factors in order to raise responsiveness. Managers understand the conflict between operational and supply strategies presented here, yet are limited in the extent they can act on this knowledge due to the multi‐level aspect of strategy and difficulties over control beyond the boundary of the firm.Practical implicationsKey performance indicators need to be modified to gauge individual sale profitability, alongside new incentives and measures to overcome demand distortion and supplier game‐playing. Further, the balance between flexibility investment and better customer fulfilment should be explored through cost analysis.Originality/valuePresents a managerial perspective of supply chain strategy development, analysed through a structured academic lens. The paper illustrates the increasingly dynamic nature of supply chains and the importance of connections between retail distribution, manufacturing, and in‐bound supply as part of the global operation.