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Assessing consequences of low cost sourcing in China

Anna Fredriksson (Institutionen för teknikens ekonomi och organisation, Logistik och transport) ; Patrik Jonsson (Institutionen för teknikens ekonomi och organisation, Logistik och transport)
International Journal of Physical Distribution and Logistics Management (0960-0035). Vol. 39 (2009), 3, p. 227-249.
[Artikel, refereegranskad vetenskaplig]

Purpose – The purpose of the paper is to develop a framework for low-cost sourcing assessment and to explore the consequences of low-cost sourcing in China for a European manufacturer.

Design/methodology/approach – The low-cost sourcing framework generated from literature and the consequence analysis is based on a case study of a European company that has outsourced part of its casting processes to Chinese suppliers.

Findings – Characteristics of low-cost sourcing are based on a literature review divided into three categories: country characteristics, supply network structure, and supply network relationships and the case study shows that these three categories of characteristics jointly create negative effects. A two-directional cause and effect relationship is proposed between the characteristics and the operational supply chain performances. The presented low-cost sourcing assessment framework should be a good starting point for low-cost sourcing assessment, including mapping a firm’s total characteristics, and for analysing their performance impact.

Research limitations/implications – The conducted single case study is not enough for identifying, formulating, and validating all existing relationships between the low-cost sourcing characteristics. The present study has identified the existence of the relationships but has not evaluated their levels of impact.

Practical implications – Managers should be aware of how suppliers in low-cost countries may affect the structures, relations, and operational supply chain performances of the supply network. This paper presents a sourcing assessment framework enabling describing what dimensions of the sourcing characteristics would be affected by sourcing to a specific area of the world and what consequences and performance effects this would have.

Originality/value – Few prior studies have focused on companies with already established relationships with low-cost-country suppliers and how these companies should make the best out of these supply chains. This study takes a holistic perspective on low-cost sourcing and identifies several streams for further research.

Nyckelord: Sourcing, Costs, Supply chain management, China

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Denna post skapades 2009-04-10. Senast ändrad 2015-02-11.
CPL Pubid: 92395


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Institutioner (Chalmers)

Institutionen för teknikens ekonomi och organisation, Logistik och transport (2005-2016)


Industriell teknik och ekonomi
Ekonomi och näringsliv

Chalmers infrastruktur

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Denna publikation ingår i:

Materials Supply and Production Outsourcing