Keeping up with growing complexity of managing global operations

Untangling the complexity generating material delivery “schedule instability”: insights from automotive OEMs

Purpose

Changes frequently made to material delivery schedules (MDSs) accumulate upstream in the supply chain (SC), causing a bullwhip effect. This article seeks to elucidate how dynamic complexity generates MDS instability at OEMs in the automotive industry.

Design/methodology/approach

An exploratory multiple-case study methodology involved in-depth semistructured interviews with informants at three automotive original equipment manufacturers (OEMs).

Findings

Dynamic complexity destabilizes MDSs primarily via internal horizontal interactions between product and process complexities and demand and SC complexities. A network of complexity interactions causes and moderates such instability through complexity absorption and generation and complexity importation and exportation.

Research limitations/implications

The multiple-case study contributes to empirical knowledge about the dynamics of MDS instability. Deductive research to validate the identified relationships remains for Future research.

Practical implications

In revealing antecedents of complexity’s effect on MDS instability, the findings imply the need to develop strategies, programs, and policies dedicated to improving capacity scalability, supplier flexibility, and the flexibility of material order fulfillment.

Originality/value

Building on complexity literature, the authors operationalize complexity transfer and develop a framework for analyzing dynamic complexity in SCs, focusing on complexity interactions. The identification and categorization of interactions provide a granular view of the dynamic complexity that generates MDS instability. The identified and proposed importance of readiness of the SC to absorb complexity challenges the literature focus on external factors for explaining complexity outcomes. The results can be used to operationalize such dynamic interactions by introducing new variables and networks of relationships. Moreover, the work showcases how a complexity perspective could be used to discern the root causes of a complex phenomenon driven by non-linear relationships.

When servitized manufacturers globalise: becoming a provider of global services

Purpose

To increase the global competitiveness of their service business, servitized manufacturers transition towards global services. Yet, the literature has not addressed this development. This study is one of the first to investigate how servitized manufacturers can manage the globalisation of their service business.

Design/methodology/approach

The study explores two cases of servitized manufacturers that transitioned from a local organisation of multi-domestic international services to a global-service organisation. The data were collected via semi-structured interviews, observations, and secondary sources.

Findings

The authors identify four elements of global service provision: operating model, global performance management, relationship governance, and staffing and employee development. The authors discuss each element and the connections between them, which the authors summarise in a proposed framework for global service provision.

Originality/value

The contributions of this research relate to the proposed framework of global service provision, which extends current conceptualisation of globalisation of routine services. The authors show the unique elements of global service provision of servitized manufacturers and discuss the theoretical and practical implications of the work.

Coordination of Digital Transformation in International Manufacturing Networks—Challenges and Coping Mechanisms from an Organizational Perspective

Coordinating the digital transformation of globally dispersed factories within international manufacturing networks has become a critical issue for competitiveness, yet there has been limited attention paid to this issue in previous research. Therefore, the purpose of this paper is to, from an organizational perspective, explore the challenges in coordinating the digital transformation in an international manufacturing network and the coping mechanisms to overcome those challenges. A case study is conducted in a manufacturing company within the heavy vehicle industry, thus contributing to the limited empirical research covering coordination of digital transformation. The data is analyzed through organizational structure and design theory, and the findings are mapped into four core dimensions: differentiation, integration, centralization, and formalization. The results show 15 challenges and 11 coping mechanisms for coordination of digital transformation in international manufacturing networks, identifying the significance of the coordination uncertainty within the formalization dimension that is particularly exposed to the changes induced by digital transformation. The findings include the need for a coordination-oriented organizational structure that incorporates how and where coordination can be actualized. The research implications contribute with new insights by providing a detailed description of the created organizational structure and, in contrast to previous research, focuses specifically on the coordination aspect of digital transformation in an international manufacturing network.

Facilitating Contextual Ambidexterity in a Global Operations Expansion Program

One of the focal challenges in managing global operations is how to utilize existing knowledge to avoid reinventing the wheel, yet to critically assess current knowledge and develop new knowledge when adapting to local conditions. Research indicates that successful organizations manage these tensions by developing ambidexterity. We elaborate on contextual ambidexterity—one specific form of ambidexterity—in the global operations expansion program at Neste. We conclude with illustrations of tools used to facilitate alignment and adaptability over time. Interestingly, different tools are used in different phases of the program. Moreover, the emphasis cycles between alignment and adaptability.

Retrospective on the launch of IJPDLM – lessons for the future of logistics and supply chain management research

Purpose

This paper offers a retrospective on the launch and first volumes of this journal. It describes the history of a unique period in our discipline when founding fathers in the US and UK collaborated with industry and each other to create a new field.

Design/methodology/approach

The authors interviewed founding editor Professor Martin Christopher and coeditor in Chief Professor Doug Lambert, conducted a bibliometric review of the first volumes of the journal and informed the analysis by approaches taken in other retrospectives published in the journal. The authors also feature historical artifacts from the journal.

Findings

The editorial focus during the early days of the journal demonstrate how the roots of the field are in cost modeling and technical work but quickly moved toward customer orientation and managerial focus. The editorial approach during the early days of the journal was on innovative research and publishing, scholarship engaged with industry, a focus on relevance and industry impact as well as leveraging research in education.

Originality/value

There have been retrospectives on the journals most recent volumes but what the authors aim to do is to reflect upon the launch and the first volumes of the journal. The authors expand and further detail the timeline of the development of the logistics field. In the process, the authors identify several historical roots for topics of greater focus in logistics and supply chain management in later years. The authors also find that many of the essential approaches and lessons learned in the period leading up to the launch and shortly after the launch of the journal do not only capture the early development of the discipline it also offers an approach and model for scholarship worthy of consideration still today. On top of that, several of the lessons learned in that period hold high relevance still today and they imply part of the path forward for the discipline and the journal, the authors develop questions for future research and research and editorial strategies.

Understanding the influence of servitization on global value chains: a conceptual framework

Purpose

This paper examines the servitization phenomenon in the context of global value chains (GVCs) and presents a conceptual framework by connecting the two literature streams—servitization and GVCs—to depict the interconnected multilevel processes by which the influence of servitization on GVC structure and governance is manifested.

Design/methodology/approach

Drawing on cross-disciplinary literature, the authors develop a multilevel conceptual framework. The theoretically informed framework advances research on servitization and GVCs and provides a line of inquiry to be explored as avenues for future research opportunities.

Findings

The authors argue that servitization instigates the formation of new ecosystems and collaborative structures within GVCs, reduces the fragmentation of the overall network structure and increases embeddedness within the subclusters of GVCs. These changes are expected to be reflected in the increase in the complexity of firms' GVC governance tasks, a greater reliance on relational governance, and an increase in the dependency on local partners in terms of the governance of GVCs.

Originality/value

This conceptual paper establishes the link between servitization and GVCs, anchors the servitization phenomenon in GVCs, explains how servitizing firms can engage in and shape GVCs and offers insights into the servitization-driven changes in GVCs. The conceptual framework is intended to lay the foundation for future empirical research on the link between servitization and GVCs.

Geopolitical disruptions and the manufacturing location decision in multinational company supply chains: a Delphi study on Brexit

Purpose

This study investigates the impact of geopolitical disruptions on the manufacturing supply chain (SC) location decision of managers in UK multinational firms. The context of study is the UK manufacturing sector and its response to the UK's decision to leave the European Union (EU), or Brexit.

Design/methodology/approach

The study adopts an abductive, theory elaboration approach and expands on Dunning's eclectic paradigm of international production. A Delphi study over four iterative rounds is conducted to gather and assess insights into manufacturing SC location issues related to Brexit. The panel consisted of 30 experts and managers from a range of key industries, consultancies, governmental organisations, and academia. The Delphi findings are triangulated using a focus group with 38 participants.

Findings

The findings indicate that the majority of companies planned or have relocated production facilities from the UK to the EU, and distribution centres (DCs) from the EU to the UK. This was because of market-seeking advantages (being close to major centres of demand, ease of access to local and international markets) and efficiency-seeking advantages (costs related to expected delays at ports, tariff and non-tariff barriers). Ownership and internalisation advantages, also suggested by the eclectic paradigm, did not play a role in the location decision.

Originality/value

The study elaborates on the OLI framework by showing that policy-related uncertainty is a primary influencing factor in the manufacturing location decision, outweighing the importance of uncertainty as an influencer of governance mode choices. The authors find that during geopolitical disruptions managers make location decisions in tight time-frames with incomplete and imperfect information, in situations of high perceived uncertainty. The study elaborates on the eclectic paradigm by explaining how managerial cognition and bounded rationality influence the manufacturing location decision-making process.

Applying Industry 4.0 technologies in the COVID–19 sustainable chains

Purpose

The purpose of this paper is 1) to investigate the effects on the crucial Industry 4.0 technological innovations that interact between the real and virtual worlds and that are applied in the sustainable supply chain process; 2) to contribute to the identification of the opportunities, the challenges and the gaps that will support the new research study developments and 3) to analyze the impact of the Industry 4.0 technologies as facilitators of the sustainable supply chain performance in the midst of the Coronavirus (COVID-19).

Design/methodology/approach

This research is performed through a bibliographic review in the electronic databases of the Emerald Insight, the Scopus and the Web of Science, considering the main scientific publications on the subject.

Findings

The bibliographic search results in 526 articles, followed by two sequential filters for deleting the duplicate articles (resulting in 487 articles) and for selecting the most relevant articles (resulting in 150 articles).

Practical implications

This article identifies the opportunities and the challenges focused on the emerging Industry 4.0 theme. The opportunities can contribute to the sustainable performance of the supply chains and their territories. The Industry 4.0 can also generate challenges like the social inequalities related to the position of the man in the labor market by replacing the human workforce with the machines. Therefore, the man-machine relationship in the Industry 4.0 era is analyzed as a gap in the literature. Therefore, as a way to fill this gap, the authors of this article suggest the exploration of the research focused on the Society 5.0. Also known as “super-smart society,” this recent theme appeared in Japan in April 2016. According to Fukuda (2020), in addition to the focus on the technological development, the Society 5.0 also aims at the quality of life and the social challenge resolutions.

Originality/value

This article contributes to the analysis of the Industry 4.0 technologies as facilitators in the sustainable supply chain performance. It addresses the impacts of the Industry 4.0 technologies applied to the supply chains in the midst of the COVID-19 pandemic, and it analyzes the research gaps and limitations found in the literature. The result of this study can add value and stimulate new research studies related to the application of the Industry 4.0 technologies as facilitators in the supply chain sustainable performance. It can encourage the studies related to the COVID-19 impacts on the sustainable supply chains, and it can promote the research development on the relationship among the man, the machine and the labor in the Fourth Industrial Revolution.

Back-shoring vs near-shoring: a comparative exploratory study in the footwear industry

After decades of off-shoring strategies, companies are often critically re-evaluating their earlier location decisions; in doing so, sometimes they implement the so-called relocation of second degree. Among them, back-shoring (i.e., relocation to the home country) and near-shoring (relocation to the home region) are two of the alternatives attracting growing interest from scholars. This paper aims to shed new light on the variables influencing the choice made between these two alternatives. As requested in the extant literature, a contingency approach is adopted, focusing attention on the footwear industry. Given the exploratory nature of the paper, evidence from 41 back-shoring and near-shoring strategies are analysed, comparing data from Spanish and Italian companies. Collected data are adapted to test hypotheses concerning three sets of variables: firms’ characteristics, motivations for the second degree relocation and its barriers. Collected data show that firm’s size directly influences the chosen alternative since larger companies prefer to near-shore instead of back-shore. When considering motivations, while the “made in” effect does not influence the firm’s choice, availability of skilled contractors and/or government aids induces companies to relocate to the home country instead of the home region. Finally, companies fearing encountering barriers, in terms of skilled contractors’ availability and/or (re-)development of internal manufacturing competences, will prefer the back-shoring rather than the near-shoring option. The study is focused on two countries (Spain and Italy) where the manufacturing sector (and the footwear industry within it) is still relevant to the local economy. Findings cannot be generalized to countries/industries where the local industry has been totally dismantled, without a previous in-depth analysis. The findings obtained offer managers useful insights on the elements that should be carefully evaluated when considering back- and near-shore alternatives. Additionally, valuable insights are provided for policy makers that plan to design industrial policies supporting back-reshoring policy initiatives. To the best of our knowledge, this is the first paper in the extant literature addressing variables influencing the choice between back- and near-shoring alternatives.

When should global manufacturers invest in production network upgrades? An empirical investigation

Purpose

In this paper, the authors empirically investigate under which conditions production network management is effective to improve manufacturers' financial performance. For this, the authors explore contingencies between production networks and the three key dimensions of organizational environment.

Design/methodology/approach

A survey with senior managers was conducted for this research. The authors used a hierarchical regression analysis to test interaction effects and draw on follow-up interviews with chief operating officers (COOs) and senior managers to elaborate and explain the found associations.

Findings

Results indicate that manufacturers' financial performance is only associated with their network capability level if they operate in hostile competitive environments. In moderate competitive environments, improvements in the network capability level are not associated with greater financial performance. In particularly munificent environments, such production network upgrades are even associated with the opposite effect.

Practical implications

Results highlight in which organizational contexts upgrading production networks has positive performance implications and under which circumstances it is ineffective or even counterproductive.

Originality/value

The authors draw on unique survey data to add quantitative evidence to the predominantly conceptual and qualitative literature on global production networks. This is also one of the first studies to connect the topics of production networks and organizational environment.

An unstructured big data approach for country logistics performance assessment in global supply chains

Purpose

The purpose of this study is to explore the potential for the development of a country logistics performance assessment approach based upon textual big data analytics.

Design/methodology/approach

The study employs design science principles. Data were collected using the Global Perspectives text corpus that describes the logistics systems of 20 countries from 2006–2014. The extracted texts were processed and analysed using text analytic techniques, and domain experts were employed for training and developing the approach.

Findings

The developed approach is able to generate results in the form of logistics performance assessments. It contributes towards the development of more informed weights of the different country logistics performance categories. That said, a larger text corpus and iterative classifier training is required to produce a more robust approach for benchmarking and ranking.

Practical implications

When successfully developed and implemented, the developed approach can be used by managers and government bodies, such as the World Bank and its stakeholders, to complement the Logistics Performance Index (LPI).

Originality/value

A new and unconventional approach for logistics system performance assessment is explored. A new potential for textual big data analytic applications in supply chain management is demonstrated. A contribution to performance management in operations and supply chain management is made by demonstrating how domain-specific text corpora can be transformed into an important source of performance information.

Archetypes of sourcing decision-making

Purpose

The purpose of this paper is to develop taxonomy of sourcing decision-making (SDM) archetypes and explore how different contextual factors influence these archetypes when global sourcing of complex components is considered a viable option.

Design/methodology/approach

A multiple case study approach with five in-depth cases is employed. In total, 19 interviews as well as publicly available and internal data from large buying firms headquartered in Austria and Germany were collected and analyzed.

Findings

The results reveal three different SDM archetypes which are described in detail (i.e. “consensus,” “argumentation” and “cabal”). Furthermore, it is found that these archetypes are mainly influenced by three contextual factors: sourcing maturity, product complexity and leadership style. The final model comprises six propositions which illustrate how these contextual factors determine companies’ SDM archetypes.

Research limitations/implications

The study contributes to theory development at the intersection of organizational buying behavior and the (global) SDM literature. Thereby, it answers the call for more rigorous investigation of the influence of contextual factors on SDM processes.

Practical implications

The findings enable practitioners to better understand and consequently manage SDM processes and their outcomes. By supporting decision-makers in identifying SDM archetypes, this study allows sourcing managers and teams to make better decisions by avoiding problems that occur in situations in which the preferred decision-making type would result in suboptimal decisions.

Originality/value

The study provides a first step toward taxonomy of SDM archetypes and is among the first that explores their underlying contextual factors.

Exploring blockchain implementation in the supply chain

Purpose

There is great interest in blockchain in the supply chain yet there is little empirical research to support the consideration of the technology. Ferdows (2018) calls for research aimed at learning from pioneers in the field and Gartner points out that the interest in blockchain holds similarities to the interest surrounding RFID 15 years ago. As a result, there may be opportunities to leverage insights from RFID research to inform the consideration of blockchain. The purpose of this paper is to explore how the Reyes et al. (2016) framework for the implementation of RFID may inform the consideration of blockchain in the supply chain.

Design/methodology/approach

A two-stage approach is used to explore RFID implementation considerations from the Reyes et al. (2016) RFID implementation framework, using an initial exploration of managers interested in blockchain using a focus group and a survey and to more in depth explore three case companies pioneering blockchain.

Findings

Several RFID implementation considerations can inform the consideration of blockchain but there are also differences in considering blockchain. A framework is developed that details considerations found to be relevant by implementation stage.

Originality/value

This paper adds to the limited amount of empirical research on blockchain in the supply chain and advances research beyond the consideration of use cases into the exploration of actual implementation of blockchain in the supply chain. The decision framework developed both leverages and nuances findings from RFID research and can inform managerial decision making. It also adds to research a multi-stage approach to implementation and uncovers rich opportunity to further learn from pioneers.