Managing the trade-off implications of global supply

Abstract

The cost versus response trade-off is a growing logistics issue due to many markets being increasingly characterized by demand uncertainty and shorter product life cycles. This is exacerbated further with supply increasingly moving to low cost global sources. However, the poor response implications of global supply are often not addressed or even acknowledged when undertaking such decisions. Consequently, various practical approaches to minimising, postponing or otherwise managing the impact of the demand uncertainty are often only adopted retrospectively. Even though such generic solutions are documented through case examples we lack effective tools and concepts to support the proactive identification and resolution of such trade-offs. This paper reports on case-based theory building research, involving three cases from the UK and USA used in developing a conceptual model with associated tools, in support of such a process.

Sustainable outsourcing: a practice survey and research opportunities

“…Stratton and Warburton (2006) consider the trade-off implications of global supply chains, but no mention is made of the sustainability as a potential driver or consideration within the outsourcing decision. The focus tends to favour the 'cost versus response' outcome.…”

“…A great deal of work has been essentially concerned with the decision to outsource, what has been traditionally the operations management 'make versus buy' decision (Yoon and Naadimuthu, 1994;Probert, 1996). Stratton and Warburton (2006) looked at trade-offs for supply chains, Harland et al (2005) considered the risks and benefits. Three research areas that have arguably the largest impact on outsourcing theory and in particular, the make versus buy decision, are transaction cost economics (Williamson, 1979), resource dependence theory (Aldrich, 1976;Pfeffer and Salancik, 1978) and the resource-based view of the firm (Wernerfelt, 1984;Barney, 1991;Peteraf, 1993).…”

Logistics and Transportation in Global Supply Chains: Review, Critique, and Prospects

“…Stratton and Warburton [69] (2006) examine the implications of outsourcing in three case studies. The authors find that in each case, as companies transition to offshoring to take advantage of reduced production and labor costs, difficulties arise in the reliability of the new suppliers and increase in lead times.…”

Planificación táctica de las operaciones en cadenas de suministro de respuesta rápida (responsive) con estructura alternativa de procesos: modelado matemático, implementación y experimentación

“…Tabla 2.4: Tiempo total de entrega para suministro global por rubro (Stratton y Warburton, 2006) Los autores mencionan que, en el caso de Griffin Manufacturing, los proveedores de Honduras requerían que la Previsión de la Demanda se hiciera con 16 semanas de anticipación a la estación de ventas. En consecuencia los errores de Previsión comúnmente excedían el 25%.…”

“…Los proveedores son confiables, es decir cumplen con los plazos de entrega y no fallan en cuanto a la calidad (Lee, 2002), sin embargo, por estar situados en otros países, tienen un plazo de entrega mayor que el de un productor local (Fisher y Raman, 1996) (en el plazo de entrega de los proveedores se incluye el tiempo de transporte hasta un almacén central de productos terminados ubicado en la misma localidad del fabricante local). Otra característica del problema es que existen dos momentos de decisión para coordinar la producción en la CS (Stratton y Warburton, 2006). En el primer momento de decisión, la capacidad de producción de los proveedores debe ser contratada con varios meses de anticipación al inicio del ciclo de ventas (es decir, cuando aún existe una alta incertidumbre en la previsión de la demanda) (ver la figura 3.3).…”