Supply Chain Configuration

Read this article, which examines the challenges western nation manufacturers currently face. Specifically, it covers firms in industrial products, toys, fast fashion, and designer furniture.

Cross-case analysis

As the four case-study companies represent different industrial contexts, it is tempting to look for a pattern of configuring the operations network primarily based on contextual influencers. We, however, find that contextual influence alone cannot explain configuration as companies competing with similar industrial conditions may choose to compete with different means and, as a result, end up with different configurations. To reflect these ambitions of companies to pursue different things with their supply chain set-up, we have used the coordination of the operations network as a proxy for the level of interdependency and commonality between partners within the supply set-up.

With respect to the strategic roles of plants within the chain, companies experiencing a high rate of change may find that prototyping and ramp-up are of significant importance in addition to the full-scale manufacturing and sourcing due to the need to integrate new inputs from process and product innovations continuously. On the other hand, companies with a low change rate will need to address benchmarking in order to push the utilization of available resources. With regards to the overall network structure, the case studies illustrate a development of frequent restructuring in search of an appropriate balance between the request for proximity to the markets and the need for specialized manufacturing in one location (economy of scale). This has challenged production engineering to develop new technologies in support of parallel production and agility. A third issue of configuration is the organizational aspects related to the infrastructure of operations. It seems that the case-study companies have been able to develop appropriate management systems and organizational structures for their full-scale manufacturing and sourcing, and they have even been able to restructure as new markets have been addressed.

However, the companies have been less aware of the importance of developing key supporting and/or indirect roles, which may assist the company in securing a more robust and effective supply chain, as they moved along their globalization trajectory. For example, critical links was unveiled in the processes related to e.g. the cooperation between functions in the value flow of the company (production, production engineering, product development, and sales), which with increased distribution and changing governance structures became even more critical for planning and improvement purposes. The case studies have also shed light on the importance of supplementing the organizational means relevant to full-scale operations with the means of knowledge sharing and development, which are typically found in the other three generic roles.

Fig. 4. Types of supply networks