Global Supply Chain Production Sourcing Benchmark Project

The Global Supply Chain Benchmark project is a research partnership involving 7 leading academic centers for the study of global supply chain production sourcing strategy. The participating schools include the Wharton School at the University of Pennsylvania, the McDonough School of Business at Georgetown University, WHU – Otto Beisheim School of Management in Vallendar, Germany, the Olin Business School, Washington University St. Louis, the Graduate School of Business at Stanford, the Graduate School of Business Administration, Kobe University, Japan and the Leavey School of Business at Santa Clara University. The project has also included participation of faculty from the Sloan School at MIT, the Antai College of Economics and Management at Shanghai Jiao Tong University and the Shanghai University of International Business and Economics. Over 100 global companies have participated in the study.

The focus of the benchmark study is to analyze current trends in global production sourcing decisions by leading global firms. Our research suggests that there is a significant wave of restructuring of global supply chains in progress. Companies are de- and increasing production volume all over the globe. Recent shifts have led to the transfer of manufacturing employment from developed countries to developing countries. There is much debate concerning future trends for reshoring and the continuation of offshoring. The goal of the project is to conduct empirical research on the scale of such decisions, their drivers and their impact.

The Benchmark has completed two rounds of the survey (one focused on companies operating in China and second based on broad sample of global firms). The project will continue to analyze the empirical results and to interact with participating companies through conferences to share the results of the research and to receive input on the research priorities for the continuation of the study.

Executive Forums

These executive forums focused on global supply chains that are managed by multinational companies that operate in the US and abroad. This includes OEMs, contract manufacturers, service providers and lower tier suppliers in both manufacturing and service industries. Our emphasis was on issues associated with the sourcing of manufacturing and services.   The following is a brief overview of the motivation and objectives of the forum.

Many manufacturing firms are re-examining the structure of their global supply chains and their associated sourcing strategy in response to the uncertainties and risks they face in these turbulent times. These adjustments are occurring against a backdrop of fundamental change to the environment in which global supply chains operate. For decades a dominant strategy in manufacturing has been to outsource to low cost global suppliers. This has led to the transfer of manufacturing jobs and development activities out of the US, Japan and Europe and into low labor cost countries such as China, India and Vietnam.   Today this trend is being challenged by a movement by some companies to “re-shore” their manufacturing by bringing it back or at least moving it closer to their developed country market, i.e. by “near-shoring”.   At the same time many firms continue to select offshore locations for outsourcing of material inputs and services.

The forums considered the current status of sourcing strategy from the perspective of major multi-national firms.   Participants were provided with the opportunity to interact with senior executives from leading multi-national companies headquartered or operating in the various regions in which the forum took place (i.e. East coast US, West coast US, China, India), to explore current thinking and practices concerning global supply chain strategy and sourcing.   Forum interactions included an exchange of ideas that identified managerial challenges and concerns. The forums also provided an overview current practices and intentions of participating companies.   The focus was on issues that include development of an understanding of the drivers of sourcing decisions as perceived by the participants in order to identify opportunities for improvement and barriers to implementation. The forum adopted a full product life cycle perspective that included issues concerning value creation through product design, manufacturing, fulfillment logistics, and after sales customer service support.   The impact of technology developments and government policies was also considered.