Global Manufacturing Supply Chain Research Articles

Editorial: ‘Harvesting a bitter fruit'-work and labour in China's consumer electronics supply chain

This issue of New Technology, Work and Employment departs from its conventional format by leading with two complementary articles that explore important contradictions between labour and capital in the global manufacturing supply chains located in Asia. The principle focus is on the conditions of work and employment generated by the manufacture of ‘new technology’ products. More specifically, these papers in different ways are concerned with the production of electronic consumables by Foxconn, the Taiwanese-owned multinational supplier, which is China’s leading exporter. In 2010, Foxconn attracted worldwide notoriety when a spate of worker suicides occurred at its factories in China and were widely reported in the media. The first of the articles provides the remarkable testimony of Tian Yu, a young female migrant worker, who attempted suicide by jumping from the fourth floor of her dormitory accommodation. Tian’s account has been crafted with great skill and sympathy by Jenny Chan. Tian’s narrative describes her endless hours of assembly line toil in a harsh factory regime driven by escalating targets, manufacturing component for Apple iPhones. The dehumanising and alienating conditions under which she worked and lived are the backdrop to her desperate act. The paper, thus, fills an important gap in our knowledge by providing a first-hand account of working in an outsourced electronic supply chain factory in China. In addition, we believe that the paper can serve as an invaluable teaching source giving students remarkable insight into the human costs of this aspect of globalisation that is ordinarily hidden from view. The second article locates this narrative in the broader political-economic context of the buyer-driven value chain, in which Apple establishes parameters and control over price-setting, production processes and product delivery from its suppliers, notably Foxconn. Based on extensive fieldwork and thorough documentary analysis, Chan, Ngai and Selden analyse the consequences of this asymmetrical power relationship. As the scale of production has ramped up, Apple’s ‘value capture’ and profits have soared while Foxconn’s margins have flatlined, the outcome being massive intensification of work and a harsh workplace managerial regime. Most significantly, the paper documents the emerging resistance of this new working class. The young migratory workers who form the workforces of the Chinese production miracle are discovering their collective capacity to act, to articulate their interests and to demand fundamental rights while facing opposition from the network of employers, government bodies and official unions.

The path to Made-in-China: How this was done and future prospects

Over the past decade, there has been increasing interest in manufacturing practices in China. By the end of 2012, China was the world's leader in manufacturing operations and the second largest economic power on the globe. This paper offers three essential insights. First, the study provides a taxonomy of China's economic development in the past thirty years. Second, the study has identified the most important and relevant attributes that contribute to the rise of a manufacturing powerhouse. Finally, the study offers a few guidelines for the practicing managers and policy makers who are interested in formulating strategies to face the challenges of dynamic global competition. The study also discussed three important phases that constitute the path to Made-in-China. Phase One, Incubation Years, focused on economic reforms and the structural shifting from a planned economy to an economy of socialism with Chinese characteristics. In the second phase, Navigation Years, China developed a modern manufacturing infrastructure. In the third phase, Dynamic Years, China adopted a proactive manufacturing strategy which emphasized soft power development. Based on the synergistic analysis provided in this study, manufacturing managers and policy makers will be able to expand their perspective on the restructuring of global manufacturing supply chains.

A supply chain configuration model for reassessing global manufacturing in China

PurposeGlobal manufacturers have faced unprecedented cost pressures in China because of Chinese currency appreciation, rising labour costs, higher oil prices and reduced value‐added tax rebates. This paper aims to reassess the decision of operating global manufacturing facilities in China.Design/methodology/approachA mixed integer programming model is developed for a typical global manufacturing supply chain that includes production in the Pearl River Delta region and trade in Hong Kong. A case study with a footwear product is used to illustrate model application and present detailed analyses.FindingsThe modelling results affirm the need of relocating labour‐intensive production that mainly competes on low costs. Nevertheless, coastal China offers considerable benefits from industrial clustering and a logistics advantage in comparison with inland China and Asian countries where labour costs are still relatively low. Hong Kong remains a robust location choice for trade operations because of its favourable tax policies.Practical implicationsRetaining production in China faces high risks from Chinese currency appreciation, while relocation to lower‐cost Asian countries is more vulnerable to risks from high oil prices. An intermediate trade operation in Hong Kong can be used to hedge against risks from unfavourable tax policy changes at manufacturing locations.Originality/valueChina has risen to an important position in global manufacturing because of its cost advantages. This paper analyzes the new phenomenon of dramatically increasing cost pressures in China. It develops a first‐of‐its‐kind supply chain configuration model for the popular front‐shop‐back‐factory business model in China.

A Generic Approach for the Graph-based Integrated Production and Intermodal Transport Scheduling with Capacity Restrictions

The performance of global manufacturing supply chains depends on the interaction of production and transport processes. Currently, the scheduling of these processes is done separately without considering mutual requirements, which leads to non- optimal solutions. An integrated scheduling of both processes enables the improvement of supply chain performance. The integrated production and transport scheduling problem (PTSP) is NP-hard, so that heuristic methods are necessary to efficiently solve large problem instances as in the case of global manufacturing supply chains. This paper presents a heuristic scheduling approach which handles the integration of flexible production processes with intermodal transport, incorporating flexible land transport and maritime transport running a given timetable. The method is based on a graph that allows a reformulation of the PTSP as a shortest path problem for each job, which can be solved in polynomial time. The proposed method is applied to a supply chain scenario with a manufacturing facility in Brazil and shipments to customers in Germany. The obtained results show that the approach is suitable for the scheduling of large-scale problems and can be flexibly adapted to different scenarios.

Helping secure the global pharmaceutical manufacturing supply chain

Helping secure the global pharmaceutical manufacturing supply chain

Global supply chain risk management strategies

PurposeGlobal supply chains are more risky than domestic supply chains due to numerous links interconnecting a wide network of firms. These links are prone to disruptions, bankruptcies, breakdowns, macroeconomic and political changes, and disasters leading to higher risks and making risk management difficult. The purpose of this paper is to explore the phenomenon of risk management and risk management strategies in global supply chains.Design/methodology/approachThis paper is based on an extensive literature review and a qualitative study comprising 14 in‐depth interviews and a focus group meeting with senior supply chain executives.FindingsThe study provides insights into the applicability of six risk management strategies with respect to environmental conditions and the role of three moderators.Research limitations/implicationsThe model is developed in a global manufacturing supply chain context. It should be tested in other contexts and with other methods to provide generalizability. The study takes a much needed step toward building a theory of risk management in global supply chains, which opens important future research directions.Practical implicationsThis research provides direction to managers for choosing risk management strategies based on the global supply chain environment. Moderators have practical implications for global supply chain managers.Originality/valueThe paper addresses an identified gap in the literature for selecting risk management strategies in global supply chains. It employs grounded theory, a methodology appropriate for theory‐building, to explore a phenomenon with an inadequate theoretical base.

An agent-based framework for collaborative negotiation in the global manufacturing supply chain network

This paper applies the multi-agent system paradigm to collaborative negotiation in a global manufacturing supply chain network. Multi-agent computational environments are suitable for dealing with a broad class of coordination and negotiation issues involving multiple autonomous or semiautonomous problem solving agents. An agent-based multi-contract negotiation system is proposed for global manufacturing supply chain coordination. Also reported is a case study of mobile phone global manufacturing supply chain management.

GE Plastics Optimizes the Two-Echelon Global Fulfillment Network at Its High Performance Polymers Division

To achieve the highest customer satisfaction at the lowest costs, GE Plastics adopted a global approach to its manufacturing operations. Previously it met demand in one geographic region with production from that region only. It developed a decision-support system (DSS) to optimize the two-echelon global manufacturing supply chain for its high performance polymers division. The DSS uses a math-programming model to maximize contribution margin while taking into consideration product demands and prices, plant capacities, production costs, distribution costs, and raw material costs. The results of the model are the optimal production quantities by plant and the total contribution margin. The DSS is implemented in Excel and uses LINGO to solve the optimization model. After successfully implementing this system at the high performance polymers division, GE Plastics is rolling it out to other divisions.

The holonic enterprise: a model for Internet‐enabled global manufacturing supply chain and workflow management

Merges the latest results obtained by the holonic manufacturing systems (HMS) consortium with the latest developed standards for platform interoperability released by the Foundation for Intelligent Physical Agents (FIPA) to propose a novel e‐business model: the holonic e‐enterprise (HE). The HE extends both the HMS and FIPA models. On one side it extends the holonic manufacturing paradigm with one top level, the inter‐enterprise one. On the other side it extends the multi‐agent system (MAS) paradigm to the hardware (physical machine) level.