Disturbances to the supply chains of high-value manufacturing firms: comparison of the perceptions of product managers and supply chain managers

Huq, Fahian; Pawar, Kulwant S.; Subramanian, Nachiappan

Abstract

We draw on the literature to categorise the supply chain disturbances (risks and uncertainties) that affect high-value manufacturing (HVM) firms when adopting the following two sourcing strategies: (a) insourcing/nearshore outsourcing, and (b) outsourcing/offshoring. We build a hierarchy structure of disturbances, which was tested in a case study of a European HVM operating in the aerospace industry. A novelty of this study is the quantitative prioritisation and comparison, using the analytic hierarchy process (AHP) method, of the disturbances reported by two groups of managers: three product managers (internally facing) and four supply chain managers (externally facing). Our findings show that managers' perceptions of firm-related, network-related and location-related disturbances can be prejudiced by their functional boundaries. We show that both product and supply chain managers prefer the insource/nearshore outsource strategy, as they feel that the disturbances while outsourcing/offshoring are significantly greater and offset the benefits of low-cost production-a counterintuitive finding. Through in-depth interviews with both groups of managers, we found the mitigation strategies are reshoring, full consideration to the total cost of acquisition (including hidden costs of distant operations) and building clusters in emerging markets to support the firm's regional hub by partnering with its existing suppliers from developed countries.

Citation

Huq, F., Pawar, K. S., & Subramanian, N. (2021). Disturbances to the supply chains of high-value manufacturing firms: comparison of the perceptions of product managers and supply chain managers. International Journal of Production Research, 59(13), 3916-3934. https://doi.org/10.1080/00207543.2020.1756503

• Journal Article Type: Article
• Acceptance Date: Apr 9, 2020
• Online Publication Date: May 4, 2020
• Publication Date: 2021
• Deposit Date: May 7, 2020
• Publicly Available Date: May 5, 2021
• Journal: International Journal of Production Research
• Print ISSN: 0020-7543
• Electronic ISSN: 1366-588X
• Publisher: Taylor and Francis
• Peer Reviewed: Peer Reviewed
• Volume: 59
• Issue: 13
• Pages: 3916-3934
• DOI: https://doi.org/10.1080/00207543.2020.1756503
• Keywords: High-Value Manufacturing; Disturbance Factors; Insourcing; Outsourcing; Offshoring; Strategic Sourcing
• Public URL: https://nottingham-repository.worktribe.com/output/4387546
• Publisher URL: https://www.tandfonline.com/doi/abs/10.1080/00207543.2020.1756503?journalCode=tprs20
• Additional Information: This is an Accepted Manuscript of an article published by Taylor & Francis in International Journal of Production Research on 04.05.20, available online: http://www.tandfonline.com/10.1080/00207543.2020.1756503