Global Sourcing Practices Research Articles

Assessing the impact of a COVID-19 pandemic on supply chain transformation: an exploratory analysis

PurposeThis paper aims to examine how significantly the COVID-19 pandemic affects supply chain operations and how the firms have reacted to the COVID-19-induced supply chain crisis. In addition, this paper investigates whether the micro, small and medium enterprises (MSMEs) are affected disproportionally by the COVID-19-induced supply chain crisis.Design/methodology/approachThis paper developed a series of hypotheses and tested them using cross-tabulation, canonical correlation, discriminant and exploratory factor analyses of the empirical data.FindingsThe descriptive data analysis and hypothesis test results revealed that the labor productivity of the manufacturing, logistics and healthcare industry sectors was affected disproportionally by the COVID-19-induced crisis. However, outsourcing and global sourcing practices themselves did not necessarily exacerbate the severity of supply chain disruptions caused by COVID-19. The authors also found that MSMEs were adversely affected by the COVID-19 pandemic to a different degree than their large counterparts.Originality/valueThis paper is one of the first of its kind to assess the extent of the COVID-19 adverse impact on supply chain operations using the exploratory analysis of the data collected from the questionnaire survey of US firms representing various industries sectors.

Disruptions in sourcing and distribution practices of supply chains due to COVID-19 pandemic: a sustainability paradigm

PurposeThe present research paper is an attempt to study how COVID-19 can affect the global sourcing practices of various supply chain intermediaries across the demand chain. This study aims to explore and is an attempt to understand the overall impact of COVID-19 on the sustainable operations of the firm such as sourcing, procurement, economic performance, social responsibility, consumption and distributions.Design/methodology/approachThis study uses a quantitative technique using data collected from 708 respondents. Structural equation modeling (SEM) has been applied to test the proposed model and hypothesis.FindingsThe findings of the study suggest that sourcing practices, distribution and sustainability considerations of manufacturers, suppliers, distributors and retailers are affected by COVID-19 to a great extent but the pandemic has also led to making supply chain intermediaries understand the changing dynamics of the business scenario which can help them in their own strategic and business evolution.Research limitations/implicationsThe current disruptions throughout global delivery chains caused by COVID-19 affect badly, the already poor-performing supply chains. Hence, the present study provides fresh insight on how organizations can limit the ill effects of COVID-19 by safeguarding some of their key sustainable operations in a post-pandemic business scenario.Originality/valueThe present study takes into consideration how core supply functions such as sourcing, distribution and manufacturing and various sustainable operations are disrupted by pandemic and its after-effects. This knowledge base can help business organizations to mitigate such problems/disruptions in the future.

Global Sourcing Strategies: A Framework for Lean, Agile, and Leagile

The main purpose of this paper is to develop a framework for utilization of lean, agile, and leagile strategies in the supply chains, where the core idea of the framework is to improve the global sourcing practices. Based on in-depth interviews with supply chain professionals and grounded theory approach, we constructed a framework of global sourcing improvement to support better utilization of lean, agile, and leagile strategies, which we believe can help the supply chains worldwide to act better, especially in various difficult conditions and sustain their business accordingly. Our proposed framework also contributes to the UN’s Sustainable Development Goals, since the core concept of the framework is to establish a new organization under the umbrella of the UN to improve the global sourcing and consequently the usage of supply chain strategies accordingly. The applicative part of the paper reveals characteristics of new developed framework, ranging from its purpose and aims, structure, key processes, functions, and its financing. Along with validation of the framework are presented benefits for society, industry, and global economy. Additionally, the paper also reviews the impact of the current health and economic crisis caused by COVID 19, on usage of the three supply chain strategies namely; lean, agility, and leagility to see how they can work in the difficult time, as COVID 19.

The Implications of Global Sourcing on the Triple Bottom Line: A conceptual analysis

The paper is to develop a conceptual analysis for the emergent field of the implications of global sourcing on the triple bottom line, which synthesizes antecedents, global sourcing practices and sustainable performance in the three dimensions of triple bottom line. We carry out a systematic literature review and analyse 70 studies on this topic. Three main themes were identified as antecedents, global sourcing practices and triple bottom line performance. Based on the literature review findings and analysis from the resource orchestration perspective, we further propose three sets of propositions to guide future research. This study provides a comprehensive understanding for studying sustainable global sourcing in the future.

Supplier Risk: The Imperative of Corporate Sustainability Diffusion in Global Supply Networks

The global dispersion of traditional value chains caused by the rapid increase in the adoption of global sourcing practices that started in the 1980’s, allied with increasing concerns over the nega...

Introducing the paradox theory in logistics and SCM research – examples from a global sourcing context

ABSTRACTThe purpose of this paper is to introduce and explore the use of paradox theory in a logistics and SCM research context. Although logistics and SCM scholars as well as practitioners have been aware about the existence of paradoxes, they have so far lacked a more formal theoretical framework for further identification and classification of these. Framed in the four general paradox classes of learning, belonging, organising and performing, the paper outlines paradoxes inherent in the global sourcing practices of two case companies. The findings demonstrate the paradox theory to be a useful tool for a systematic illumination and classification of paradoxes valuable for practitioners, researchers as well as teachers in the domain of logistics and SCM. The paradox theory may also help to identify and emphasise inconsistencies among different research fields. This is particularly valuable for research areas built upon multiple research disciplines such as global sourcing. In conclusion, the paper suggests that the paradox theory offers a new lens through which an organisation could be better explored, described and understood.

The effect of controversial global sourcing practices on the ethical judgments and intentions of U.S. consumers

Global sourcing has led to lower cost and more effective supply chains for many companies. However, when the cost-driven practices of many suppliers in these chains come to light there is often considerable debate over the ethics of these practices. This research uses the well-known Hunt–Vitell framework as the theoretical foundation for a structural equation model of the deontological and teleological evaluations used by consumers when making ethical judgments of a firm's controversial cost-driven global sourcing practices. Data from a large-scale U.S. consumer survey show the importance of deontological and teleological evaluations in forming consumers’ ethical judgments of global sourcing practices, and establish a strong relationship between ethical judgment and the intention of consumers to alter consumption of a firm's products. Extensions to the framework and demographic analyses for age, gender, and income provide insights as to how perceptions of these practices affect consumer evaluations of a company involved in global sourcing and how consumers actualize their resultant intentions.

An evaluation of U.S. consumer perceptions of controversial global sourcing practices

Global sourcing has led to lower cost and more effective supply chains for many companies. However, when the cost-driven practices of many suppliers in these chains come to light there is often con...

Bring In, Go Up, Go West, Go Out: Upgrading, Regionalisation and Delocalisation in China’s Apparel Production Networks

The rise of China’s export-oriented apparel industry since the 1990s has been driven largely by global sourcing practices intent on capturing the cost advantages of a development model predicated, in part, on unskilled or semi-skilled migratory labour flows, linking western and central labour pools to coastal production sites. Until recently, the dominance of this model has fuelled growth in low-wage employment in the coastal regions and has provided few opportunities for economic and social upgrading. Since the early 2000s, coastal factories have increasingly had to confront difficulties generated by the increasing social and economic costs of this regionally concentrated low wage growth model. Specifically, this paper focuses on the role of the apparel industry in this process. It documents the major changes in organisation and geographies of economic activity in the industry, and demonstrates how the central and local state, domestic and international capital and Chinese and other Asian workers are shaping the changing organisation and geography of China’s apparel industry. The paper focuses particularly on firm strategies and state policies that have arisen in response to pressure to increase wages from workers, rising materials and energy costs and competition from other low-cost producers in Asia.

Managing Global Sourcing: Inventory Performance

The use of global suppliers has increased considerably over the last three decades. Operations management theory establishes that global sourcing requires more units of inventory, but since these units are often procured at a lower cost from global suppliers the capital invested in inventory and the consequent financial burden may increase or decrease with global sourcing. This study provides rigorous firm-level empirical evidence that links the global sourcing practices of public U.S. firms and their inventory investments. We process bill of lading manifests (customs forms) to extract information on over half a million sea shipments from global suppliers to U.S. public firms and link this information with quarterly financial data from the Compustat database. We provide stylized facts on the participation of different firms and sectors in global trade. Using a simultaneous equation model, we find that an increase in global sourcing results in an increase in inventory investment. A 10% shift in sourcing from domestic to global suppliers increases the inventory investment by 8.8% for an average firm in our sample. We also find that increasing the number of suppliers can mitigate this increase in inventory investment: for example, going from single to dual sourcing reduces inventory investment by about 11%. We illustrate the use of our estimates to identify the impact of changing global sourcing strategy on inventory investment and operational performance metrics. This paper was accepted by Martin Lariviere, operations management.

Managing Global Sourcing: Inventory Performance

The use of global suppliers has increased considerably over the last three decades. Operations management theory establishes that global sourcing requires more units of inventory, but since these units are often procured at a lower cost from global suppliers the capital invested in inventory and the consequent financial burden may increase or decrease with global sourcing. This study provides the first rigorous firm-level empirical evidence that links the global sourcing practices of public U.S. firms and their inventory investments. We process bill of lading manifests (customs forms) to extract information on over half a million sea shipments from global suppliers to U.S. public firms and link this information with quarterly financial data from the Compustat database. We provide stylized facts on the participation of dfferent firms and sectors in global trade. Using a simultaneous equation model, we find that an increase in global sourcing results in an increase in inventory investment. A 10% shift in sourcing from domestic to global suppliers increases the inventory investment by 8.8% for an average firm in our sample. We also find that increasing the number of suppliers can mitigate this increase in inventory investment: for example, going from single to dual sourcing reduces inventory investment by about 11%. We illustrate the use of our estimates to identify the impact of changing global sourcing strategy on inventory investment and operational performance metrics.

Supplier Selection Criteria and Perceived Benefits and Challenges of Global Sourcing Apparel Firms in the United States

While nearly 90% of apparel consumed in the United States is sourced overseas, limited empirical research of this practice has been conducted. To provide an in‐depth understanding of U.S. apparel manufacturers’ global sourcing practices, this study examined the differences in selection criteria and benefits and challenges associated with global sourcing based on two firm characteristics (sourcing items and top management’s commitment to global sourcing). Analyses of data collected from U.S. apparel manufacturers revealed no significant differences in supplier selection criteria or in perceived benefits and challenges by sourcing items. However, a significant difference was found based on top management’s commitment to global sourcing. That is, firms with strong commitment from top management placed significantly more weight on sourcing country when selecting overseas partners, perceived more benefits of global sourcing, and perceived fewer challenges in risks associated with foreign trade than did firms with low commitment from top management. An implication for academia is that firms’ managerial characteristics should be taken into account in examining the effectiveness of global sourcing.

Global sourcing practices: the perceived importance of success factors and issues of actual implementation

An abundance of previous studies has investigated aspects of international purchasing and global sourcing, mainly focusing on the benefits, challenges, critical success factors, strategy development and the issues associated with the progression between different levels of sourcing. In such previous studies numerous factors have been identified as being critical to successfully develop and implement a global sourcing strategy. The research on which this paper is based seeks to understand how companies based in the UK have approached the implementation of their sourcing strategy. This paper highlights findings from a survey into the relationships between the perceived importance of various success factors for global sourcing and the actual implementation of such factors in global sourcing strategies.

Supply Chain Management and Retailer Performance: Emerging Trends, Issues, and Implications for Research and Practice

In an environment with increasing competition and a growing need for operational efficiencies and customer orientation, retailers are looking beyond their organizational boundaries to develop and leverage the resources and capabilities of their supply chain partners to create superior value and competitive advantages in the marketplace. In this article, the authors discuss how three recent trends—global sourcing practices, multichannel routes to market, and relationship-based innovation—are transforming the retail landscape and leading to a variety of performance improvements with regard to brand image, reputation, sales and profits, innovation, and relationships. For each of these major trends, this article highlights key issues, identifies relevant literature, and offers propositions for further research.

Global sourcing versus domestic sourcing: Implementation of technology, competitive advantage, and performance

While it is thought that global sourcing is critical to achieve competitive advantage, no substantial empirical data has been provided with respect to its role in increasing companies' performance and in sustaining competitive advantages. This industry-specific exploratory study is designed to fill these voids of previous studies and to provide a realistic picture of current global sourcing practices. This study particularly compared global sourcing versus domestic sourcing firms in terms of implementation of technology, perceptions of competitive advantage, and performance. The survey results, with 113 US apparel manufacturers responding, showed that companies with large sales volumes who produce fashion-oriented apparel products significantly source globally. Companies with small sales volumes and focusing basic items tend to source domestically. Global versus domestic sourcing firms were significantly different in implementation of some technologies, sources of competitive advantage, and operational performances. However, in terms of market performances, global versus domestic sourcing firms were not significantly different. Based on findings, theoretical and practical implications were suggested.

Sourcing in the global aerospace supply chain using online reverse auctions

This article discusses the use of online reverse auctions to source engineered components in global aerospace supply chains using online reverse auctions and examines the specific case where a long-established U.S. economic cluster supporting large tier-one aerospace companies must compete against globally distributed sources of supply favored by their customers due to unit price savings, principally the result of lower wages. The article also examines if global sourcing practices based on power-based bargaining is an intelligent or effective solution to market pressure demanding lower prices, or whether collaborative problem solving and the creation of knowledge-sharing networks offers greater potential for cost savings and improved long-term supply chain competitiveness. Key factors that contributed to the recent failure of global sourcing initiatives using online reverse auctions are presented. Findings can be generalized to other industries that use online reverse auctions for globally sourcing engineered components that rely on networks of supporting service suppliers to create finished goods.