Coordination of Supply Chain Networks and the Emergence of Mini-Maestros
Pilar Ester Arroyo
ITESM Campus Toluca - Business School
Gabriel R. Bitran
Massachusetts Institute of Technology (MIT) - Sloan School of Management
December 1, 2007
MIT Sloan Research Paper No. 4674-08
Companies recognize international sourcing as a business practice useful to reduce product prices, deal with supply shortages and identify new competitive suppliers. Effective international sourcing implies the integration and coordination of materials, processes, information flows and multiple producers at each buying location. Many companies do not have the capabilities or the willingness to develop and manage such sourcing networks; therefore, other entities have assumed these responsibilities. These coordinators are in charge of the integration of many suppliers to develop full-package production, serve as liaisons between suppliers' capabilities and market demands, and provide the technical and financial support to sustain the sourcing network. The review of the industrial clustering and global supply chain literature allowed the identification of such coordinators in Mexico. The emergence and profile of these coordinators is associated with corporate strategies of multinational firms, the efforts of industrial groups, and the governmental policies for the development of dynamic industrial regions. This paper analyzes the characteristics of four coordination models identified in the Mexican context, focusing on their contribution to the participation and upgrading of national suppliers. The profile of the coordinator firm, the type of relations that this firm sustains with producers and the support offered to suppliers is also discussed. A particular emphasis is given to the fourth model where a third party, a knowledge and service company, assumes the coordinator role. The interest on this model is due to its novelty, the flexibility of the sourcing network, and the potential impact on regional development that could result from the intervention of a neutral third party as coordinator of the activities of multiple local and specialized suppliers.
Number of Pages in PDF File: 64
Keywords: Supply chain coordination, industrial clustering, global supply chain, supplier upgrading, advanced logistics servicesworking papers series
Date posted: January 10, 2008
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