The contribution of global sourcing to the economic performance of organizations: Analysis of the points of view of the supply chain participants

Journal of Industrial Engineering and Management, Jun 2018

Purpose: This paper aims at investigating the reasons for the complex and long lead time from global suppliers that causes inventory shortages.  It  focuses on supply chain risk management in global sourcing.  This study  has revealed all the specific risks of a global sourcing project and has provided some solutions for risk management: three-step risk management, safety stock, data sharing and driving supplier performance.Design/methodology/approach: A qualitative study is conducted to propose concrete recommendations on three topics: risk management, safety stock and information sharing. A semi-structured survey-guided interview was used to collect related data, and the answers were assessed using syntactic, lexical, thematical and NVivo software analysis.Findings: This study  has revealed all the specific risks of a global sourcing project and has provided some solutions for risk management: three-step risk management, safety stock, data sharing and driving supplier performance.Originality/value: Through research work, we have noticed that the world of the Supply Chain is constantly evolving and that it is becoming more and more complex. Through these interviews, we have noticed that the role of purchasing is changing differently in each sector.

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The contribution of global sourcing to the economic performance of organizations: Analysis of the points of view of the supply chain participants

Piloter la performance fournisseurs pour sécuriser sa logistique. Supply Chain Magazine 2013-0953 The Contribution of Global Sourcing to the Economic Performance of Organizations: Analysis of the Points of View of the Supply Chain Participants Nouha Lahiani 2 Kouami Seli Apedome 1 Joelle Zhu 0 0 École Supérieure de Commerce Extérieure de Paris , France 1 Université d'Ottawa , Canada 2 Paris Diderot University , France Purpose: This paper aims at investigating the reasons for the complex and long lead time from global suppliers that causes inventory shortages. It focuses on supply chain risk management in global sourcing. This study has revealed all the specific risks of a global sourcing project and has provided some solutions for risk management: three-step risk management, safety stock, data sharing and driving supplier performance. Design/methodology/approach: A qualitative study is conducted to propose concrete recommendations on three topics: risk management, safety stock and information sharing. A semistructured survey-guided interview was used to collect related data, and the answers were assessed using syntactic, lexical, thematical and NVivo software analysis. Findings: This study has revealed all the specific risks of a global sourcing project and has provided some solutions for risk management: three-step risk management, safety stock, data sharing and driving supplier performance. Originality/value: Through research work, we have noticed that the world of the Supply Chain is constantly evolving and that it is becoming more and more complex. Through these interviews, we have noticed that the role of purchasing is changing differently in each sector. risk management; global sourcing; replenishment; lead time; inventory shortages 1. Introduction In the current business environment, manufacturing companies should be increasingly competitive and flexible (Lahiani, Hani, Triki & El Mhamedi, 2014). Therefore, a growing number of companies are working with Asian suppliers in order to take advantage of cost reduction in the purchase of raw materials, components, subassemblies and products, especially compared to the French market in which labour costs are comparatively high (Hubert, 2013; Babai, 2005) . Several companies have been trying to improve their competitiveness by implementing a global sourcing strategy (Ivanov, Tsipoulanidis & Schönberger, 2017). However, this approach does not seem to be fully effective, as the long lead time from overseas manufacturers involved in global sourcing risks causing potential inventory shortages. Moreover, this context leads to a complexity of replenishment flows and heightened need for risk management in supply chains. This study is concerned with the risk mitigation strategies for long inventory shortages by controlling the replenishment of flows. First, long inventory shortages due to poor risk management of distant supply flows requires control of replenishment flows. This flow management is based on an accurate sharing of information between the various stakeholders of a supply chain. To provide recommendations, we surveyed eleven companies that work with global suppliers without difficulties in inventory management. We focus on the risk management in global sourcing: how to identify and reduce risks. This study aims to investigate the complex and long lead time from global suppliers, causing inventory shortages. It will focus on risk management in global-sourcing supply chain. The evolution and complexity of supply chain management will be analysed. The current issues faced by all French companies in global sourcing will be studied. While global sourcing is considered to be a leading competitive advantage, it is also associated with risk factors such as cultural differences, global communication and high inventory levels (Portioli-Staudacher & Tantardini, 2009). 2. Related Literature Review This study supplements the existing body of research dedicated to risk management in global sourcing. It also provides solutions for inventory reduction in global sourcing. Few authors focus on inventory shortages because despite the abundance of data, there is a long lead time between two orders. Existing solutions focus on better stock management in the global sourcing context. The goal is to find a balance to avoid both stock shortages and excess inventory. The analysis of replenishment flows is presented in the first part and the risk prevention in distant supply in the second. 2.1 Analysis of Procurements Flows Procurement processes take place at the upstream of the company’s business: they represent the way to purchase goods and services from the suppliers for storage and use in production and for sale of final products. The concept consists of placing orders to replenish inventory according to demand (Hubert, 2013). Its role is to organize, plan and control all inventories, plan replenishment orders and determine quantities and stock management. P (...truncated)


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Nouha Lahiani, Kouami Seli Apedome, Joelle Zhu. The contribution of global sourcing to the economic performance of organizations: Analysis of the points of view of the supply chain participants, Journal of Industrial Engineering and Management, 2018, pp. 513-527, Volume 11, Issue 3, DOI: 10.3926/jiem.2574