Global Operations Sourcing Strategy: A Chinese Perspective

33 Pages Posted: 28 Jun 2015 Last revised: 21 Nov 2017

See all articles by Y. Chen

Y. Chen

Formerly Known as Shanghai Institute of Foreign Trade

Morris A. Cohen

University of Pennsylvania - The Wharton School

Shiliang Cui

Georgetown University - McDonough School of Business

Ming Dong

Shanghai Jiao Tong University (SJTU) - Antai College of Economics and Management

Shaoxuan Liu

Shanghai Jiao Tong University (SJTU) - Antai College of Economics and Management

David Simchi-Levi

Massachusetts Institute of Technology (MIT) - School of Engineering

Date Written: June 20, 2015

Abstract

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.

Suggested Citation

Chen, Y. and Cohen, Morris A. and Cui, Shiliang and Dong, Ming and Liu, Shaoxuan and Simchi-Levi, David, Global Operations Sourcing Strategy: A Chinese Perspective (June 20, 2015). Available at SSRN: https://ssrn.com/abstract=2623770 or http://dx.doi.org/10.2139/ssrn.2623770

Y. Chen

Formerly Known as Shanghai Institute of Foreign Trade

No. 1900, Wenxiang Road
Shanghai, 201620
China

Morris A. Cohen (Contact Author)

University of Pennsylvania - The Wharton School ( email )

Philadelphia, PA 19104
United States

Shiliang Cui

Georgetown University - McDonough School of Business ( email )

Washington, DC 20057
United States

Ming Dong

Shanghai Jiao Tong University (SJTU) - Antai College of Economics and Management ( email )

No.535 Fahuazhen Road
Shanghai Jiao Tong University
Shanghai, Shanghai 200052
China

Shaoxuan Liu

Shanghai Jiao Tong University (SJTU) - Antai College of Economics and Management ( email )

1954 Huashan Rd.
Shanghai Jiao Tong University
Shanghai, Shanghai 200030
China

David Simchi-Levi

Massachusetts Institute of Technology (MIT) - School of Engineering ( email )

MA
United States

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