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Article
Publication date: 19 April 2011

Holger Schiele, Philipp Horn and Bart Vos

Research results concerning the cost‐saving potential of international sourcing have been ambiguous and the topic has been covered in isolation without accounting for…

Abstract

Purpose

Research results concerning the cost‐saving potential of international sourcing have been ambiguous and the topic has been covered in isolation without accounting for influences of alternative cost‐saving approaches. This paper aims to analyze the expected financial impact of international sourcing in relation to savings potential attributed to other sourcing tactics, such as, e.g. collaborative product improvement. Furthermore, the paper tests for potential trade‐offs between different levers.

Design/methodology/approach

Data stem from results of 134 cross‐functional cost‐saving workshops using an identical methodology. Workshop participants identified and estimated cost‐saving projects considering seven sourcing levers. Results were recorded in a standardized way and analyzed scrutinizing secondary data.

Findings

Contrary to other studies, data revealed that international sourcing projects averaged 3.4 percent savings expectations. More than 80 percent of total savings potential was attributed to other sourcing levers, such as pooling of demand or process improvement. Results highlight possible trade‐offs between international sourcing and, e.g. joint product optimization.

Research limitations/implications

A rigorous and strict, highly standardized method was employed and data were validated via cross‐functional team discussions, however, ex ante expectations instead of ex post realized savings are analyzed.

Practical implications

Findings give guidance on the importance of international sourcing compared to other levers and help to correct the misconception of international sourcing as a “purchasing panacea.” The findings highlight the need to develop a coherent sourcing strategy for specific commodity groups, including reinforcing tactics and avoiding trade‐offs.

Originality/value

For the first time, explicitly cost‐savings expectations from international sourcing have been analyzed together with other cost‐saving levers concerning relative importance and possible trade‐offs among them.

Details

International Journal of Physical Distribution & Logistics Management, vol. 41 no. 3
Type: Research Article
ISSN: 0960-0035

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Article
Publication date: 10 August 2018

Mingu Kang, Kihyun Park, Ma Ga (Mark) Yang and Mark H. Haney

The purpose of this paper is to explore how a foreign invested manufacturing company’s (FIMC) components sourcing process evolves in order to improve its supply chain…

Abstract

Purpose

The purpose of this paper is to explore how a foreign invested manufacturing company’s (FIMC) components sourcing process evolves in order to improve its supply chain outcomes in the context of China’s processing trade.

Design/methodology/approach

Grounded in the theory bases of the international sourcing process and supply chain integration, this study utilizes a single-case-study approach with a small- to medium-sized FIMC engaged in China’s processing trade.

Findings

This study identifies three stages of the components sourcing process: simple assembly stage, components localization stage and supply chain integration stage. In addition, the case study suggests that the type of processing trade evolves from processing with supplied materials to processing with imported materials as the sourcing process proceeds through the three stages and the internal and external environments change.

Originality/value

To our knowledge, this paper is the first to focus on an FIMC’s components sourcing process in the context of China’s processing trade. It contributes to a better understanding of how FIMCs progress through the components sourcing process and apply different types of processing trade in China to maximize their supply chain outcomes.

Details

Industrial Management & Data Systems, vol. 118 no. 9
Type: Research Article
ISSN: 0263-5577

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Article
Publication date: 1 April 1990

Larry C. Giunipero and Robert M. Monczka

Analysis of the organisational structures utilised to conduct international purchasing activities was undertaken at 24 multinational corporations. The majority of the…

Abstract

Analysis of the organisational structures utilised to conduct international purchasing activities was undertaken at 24 multinational corporations. The majority of the corporations studied had decentralised purchasing organisations and all had corporate purchasing staffs. Four basic approaches were found: (1) totally decentralised; (2) co‐ordinated; (3) totally centralised; and (4) separate international purchasing group. Within this overall framework there were several forms of staff assistance to assist operating units effectively accomplish their international purchasing goals. This assistance included foreign buying offices, trading companies and international staff specialists. There was also a common philosophy which indicated the necessity of worldwide sourcing.

Details

International Journal of Physical Distribution & Logistics Management, vol. 20 no. 4
Type: Research Article
ISSN: 0960-0035

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Article
Publication date: 1 September 2003

Robert J. Trent and Robert M. Monczka

The ability to satisfy customer demands while responding to relentless competitive pressure requires creative and often complex approaches to managing a firm's supply…

Abstract

The ability to satisfy customer demands while responding to relentless competitive pressure requires creative and often complex approaches to managing a firm's supply chain. Perhaps more than any other area, executive managers increasingly believe that a concept called globalization offers the best opportunity to achieve major performance gains. One area where many companies can begin to capture the benefits of globalization is global sourcing, which involves the worldwide integration of engineering, operations, and procurement centers within the upstream portion of a firm's supply chain. Unfortunately, capturing the benefits potentially offered by globalization is often limited by a lack of understanding concerning how to pursue this important topic. To help overcome this limitation this article presents a five‐level continuum that illustrates the differences between international purchasing and global sourcing, examines the factors that are the most critical to global success, and concludes with a brief discussion of future global sourcing directions.

Details

International Journal of Physical Distribution & Logistics Management, vol. 33 no. 7
Type: Research Article
ISSN: 0960-0035

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Article
Publication date: 1 January 2014

Anna Jonsson and Daniel Tolstoy

– The purpose of this paper is to offer a thematic analysis of global sourcing and international purchasing issues in international retail firms.

Abstract

Purpose

The purpose of this paper is to offer a thematic analysis of global sourcing and international purchasing issues in international retail firms.

Design/methodology/approach

We review literature that addresses purchasing/sourcing activities of retail firms in foreign markets. We categorize this literature into different themes and analyse how these themes are conceptually or empirically linked to performance. We then use the thematic analysis as a foundation for suggesting potential avenues for future research.

Findings

Four distinct themes emerge from our literature review.

Originality/value

There is a lack of research that addresses how retail firms can extract value from global sourcing and international purchasing activities. A thematic review, along with a careful classification of different themes, could lead to an enhanced understanding of the processes and objectives that underpin global sourcing and international purchasing activities in retail firms.

Details

International Journal of Retail & Distribution Management, vol. 42 no. 1
Type: Research Article
ISSN: 0959-0552

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Article
Publication date: 1 December 1999

Martin Fraering and Sameer Prasad

Billions of dollars are being poured into developing nations by multinationals as part of their diversification, divestiture, facility location, and supplier selection…

Abstract

Billions of dollars are being poured into developing nations by multinationals as part of their diversification, divestiture, facility location, and supplier selection strategies. By integrating the literature in international business, marketing, purchasing, and operations management, a contingency model is developed to minimize the overall costs of such decisions. This model provides linkages between the type of product, organizational and country characteristics, and the logistics and sourcing strategies. In addition, it provides specific recommendations to government officials in helping their countries become global platforms for manufacturing and attracting foreign investment.

Details

Logistics Information Management, vol. 12 no. 6
Type: Research Article
ISSN: 0957-6053

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Article
Publication date: 22 May 2009

Kusumal Ruamsook, Dawn M. Russell and Evelyn A. Thomchick

The purpose of this paper is to investigate the issues pertinent to sourcing internationally from low‐cost countries (LCCs) and to understand which issues are associated…

Abstract

Purpose

The purpose of this paper is to investigate the issues pertinent to sourcing internationally from low‐cost countries (LCCs) and to understand which issues are associated most strongly with a firm's logistics performance.

Design/methodology/approach

Comparative examination of supply sources in developed countries and LCCs is conducted using a paired‐sample setting. Data acquired by a mail survey of US‐based manufacturing firms are analyzed using a canonical correlation analysis (CCA). CCA helps to reveal the structure of relationships within and between a set of sourcing issue variables and a set of the logistics performance variables investigated.

Findings

Results indicate that the issues that should be priorities for improvement are: supplier production capability; business culture and practices; and communication infrastructure.

Research limitations/implications

The survey data and analysis focused on US manufacturing firms importing from LCCs. However, there is increasing activity of US retailers importing from LCCs, suggesting a need for a follow‐on study which considers the retailer perspective.

Practical implications

Results not only validate the issues to be considered in sourcing from LCCs, but also provide a direction for logistics managers in allocating an organization's scarce resources to the issues of highest potential for improving logistics performance.

Originality/value

The fast emerging role of LCCs as supply sources of US firms and the cost advantages of sourcing from LCCs are widely recognized. However, challenges associated with sourcing internationally from LCCs and the extent to which they are related to a firm's logistics performance have received limited attention in existing logistics research. This study contributes valuable insights into this area of international sourcing and logistics management.

Details

The International Journal of Logistics Management, vol. 20 no. 1
Type: Research Article
ISSN: 0957-4093

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Article
Publication date: 1 January 1993

Khalid F. Alotaibi, Stanley E. Fawcett and Laura Birou

Increasing competitive pressure over the past 20 years has forced many companies to re‐evaluate their value‐added systems. This re‐evaluation has greatly amplified the…

Abstract

Increasing competitive pressure over the past 20 years has forced many companies to re‐evaluate their value‐added systems. This re‐evaluation has greatly amplified the managerial attention focused on purchasing. Indeed, many firms have begun to emphasize purchasing in their attempts to improve their competitive positions. Two advanced sourcing practices have been particularly important: global and JIT sourcing. This paper: 1) reviews the literature pertaining to these two sourcing practices, 2) considers potential competitive impact, 3) explores issues of compatibility, and 4) presents future research directions.

Details

International Journal of Commerce and Management, vol. 3 no. 1/2
Type: Research Article
ISSN: 1056-9219

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Article
Publication date: 1 July 1997

Larry C. Giunipero and Robert M. Monczka

Discusses analysis of the organizational structures utilized to conduct international purchasing activities which was undertaken at 24 multinational corporations. The…

Abstract

Discusses analysis of the organizational structures utilized to conduct international purchasing activities which was undertaken at 24 multinational corporations. The majority of the corporations studied had decentral‐ ized purchasing organizations and all had corporate purchasing staffs. Four basic approaches were found: (1) totally decentralized; (2) co‐ordinated; (3) totally centralized; and (4) separate international purchasing group. Within this overall framework there were several forms of staff assistance for helping operating units effectively to accomplish their international purchasing goals. This assistance included foreign buying offices, trading companies, and international staff specialists. There was also a common philosophy which indicated the necessity of worldwide sourcing.

Details

International Journal of Physical Distribution & Logistics Management, vol. 27 no. 5/6
Type: Research Article
ISSN: 0960-0035

Keywords

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Book part
Publication date: 23 November 2017

Alessandra Perri and Grazia D. Santangelo

Multinational corporations (MNCs) have increasingly sourced knowledge across borders, and foreign subsidiaries operations have played a critical role in MNC international

Abstract

Multinational corporations (MNCs) have increasingly sourced knowledge across borders, and foreign subsidiaries operations have played a critical role in MNC international knowledge sourcing strategies. The growing responsibility of foreign subsidiaries has paralleled an interest on the geography of this phenomenon by international business and international management scholars. In this chapter, we review this research. In addition, based on recent research in economics and management drawing on economic geography and innovation studies, we highlight possible avenues of research to enrich our understanding of the geographical aspects of international knowledge sourcing. In particular, we suggest three lines of research opportunities. A first opportunity relates to the explicit consideration of distance and border effects. A further research opportunity arises from investigating the geographical distance of heterogeneous host country knowledge sources from the foreign subsidiary. A final research opportunity we discuss is about the contribution of heterogeneous host country knowledge sources to the variety of knowledge developed by the foreign subsidiary.

Details

Distance in International Business: Concept, Cost and Value
Type: Book
ISBN: 978-1-78743-718-0

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