Global Operations Sourcing Strategy: A Chinese Perspective
33 Pages Posted: 28 Jun 2015 Last revised: 21 Nov 2017
Date Written: June 20, 2015
We report on a survey of global manufacturing sourcing decisions that were made by multi-national companies operating in China. Based on responses from Chinese managers, the survey explored explicit sourcing and technology company decisions. The analysis provided insights into what these firms are doing with respect to global sourcing and why they are doing so. Analysis of the responses also shed light on how these decisions were made. Our results tested the validity of various arguments that have been put forward to predict or explain the pattern of global sourcing shifts that is taking place. The key takeaways from this paper are 1) the observed pattern of decision making, which can be grouped into dominant flows, indicates that re-shoring to the developed economies is not happening on a large scale and that shifting in and out of and within China is occurring with direction and reasons dependent on the particular industry, and 2) insight into the fact that that firms are evaluating complex tradeoffs when making both technology and sourcing decisions and thus a single dominant driver, such as labor cost, does not adequately explain the observed patterns.
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