The "ugly twins": Failed low-wage-country sourcing projects and their expensive replacements

Journal of Purchasing and Supply Management

Volumn 19, Issue 1, 2013, Pages 27-38

  Horn, Philipp ^a   Schiele, Holger ^b   Werner, Welf ^a  

^a JACOBS UNIVERSITY BREMEN   (Germany)

^b UNIVERSITY OF TWENTE   (Netherlands)

Author keywords

China; Global sourcing; International sourcing; Isomorphism; Low wage country sourcing; Performance; Total cost of ownership

Indexed keywords

EID: 84876137664     PISSN: 14784092     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.pursup.2012.09.001     Document Type: Article

References (102)

1. Abrahamson E. Management fashion, academic fashion, and enduring truths. Academy of Management Review 1996, 21:616-618.
2. Akkermans H., Bogerd P., Vos B. Virtuous and vicious cycles on the road towards international supply chain management. International Journal of Operations & Production Management 1999, 19:565-581.
3. Alguire M., Frear C., Metcalf L. An examination of the determinants of global sourcing strategy. Journal of Business & Industrial Marketing 1994, 9:62-74.
4. Arnold U. Organization of global sourcing: ways towards an optimal degree of centralization. European Journal of Purchasing & Supply Management 1999, 5:167-174.
5. Barney J. How a firm's capabilities affect boundary decisions. Sloan Management Review 1999, 40:137-147.
6. Bendoly E., Croson R., Goncalves P., Schultz K. Bodies of knowledge for research in behavioral operations. Production and Operations Management 2010, 19:434-452.
7. Bovet D., Martha J. Value Nets: Breaking the Supply Chain to Unlock Hidden Profits 2000, John Wiley & Sons, New York, NY.
8. Bowman E.H. Consistency and optimality in managerial decision making. Management Science 1963, 9:310-321.
9. Bozarth C., Handfield R.B., Das A. Stages of global sourcing strategy evolution: an exploratory study. Journal of Operations Management 1998, 16:241-255.
10. Callahan T. Comparisons of the competitive position of Canadian, Mexican, and U.S. suppliers. The Journal of Supply Chain Management 2000, 36:43-54.
11. Camerer C., Lovallo D. Overconfidence and excess entry: an experimental approach. The American Economic Review 1999, 89:306-318.
12. Caplice C., Sheffi Y. A review and evaluation of logistics performance measurement systems. International Journal of Logistics Management 1995, 6:61-74.
13. Carter J.R., Maltz A., Yan T., Maltz E. How procurement managers view low cost countries and geographies. International Journal of Physical Distribution & Logistics Management 2008, 38:224-243.
14. Carter J.R., Narasimhan R. Purchasing and supply management: future directions and trends. Journal of Supply Chain Management 1996, 32:2-12.
15. Carter J.R., Vickery S.K. Currency exchange rates: their impact on global sourcing. Journal of Purchasing and Materials Management 1989, 25:19-25.
16. Cavinato J. A total cost/value model for supply chain competitiveness. Journal of Business Logistics 1992, 13. 285-285.
17. Chen C.C., Yang C.C. Cost-effectiveness based performance evaluation for suppliers and operations. Quality Management Journal 2002, 9:59-73.
18. Cho J., Kang J. Benefits and challenges of global sourcing: perceptions of U.S. apparel retail firms. International Marketing Review 2001, 18:542-561.
19. Cokins G. Activity-Based Cost Management: An Executive's Guide 2001, John Wiley & Sons, Burr Ridge, IL.
20. Cooper H. Synthesizing research: a guide for literature reviews. Sage Publications Inc 1998.
21. Cyert R., March J. A Behavioral Theory of the Firm 1992, Wiley-Blackwell, New Jersey.
22. Degraeve Z., Roodhooft F. Improving the efficiency of the purchasing process using total cost of ownership information. The Case of Heating Electrodes at Cockerill Sambre S.A. European Journal of Operational Research 1999, 112:42-53.
23. Di Maggio P., Powell W. The iron cage revisited: institutional isomorphism and collective rationality in organizational fields. American Sociological Review 1983, 48:147-160.
24. Dornier P., Ernst R., Fender M., Kouvelis P. Global Operations and Logistics: Text and Cases 1998, John Wiley & Sons, New York, NY.
25. Droge C., Jayaram J., Vickery S.K. The effects of internal versus external integration practices on time-based performance and overall firm performance. Journal of Operations Management 2004, 22:557-573.
26. Easton L., Murphy D.J., Pearson J.N. Purchasing performance evaluation: with data envelopment analysis. European Journal of Purchasing & Supply Management 2002, 8:123-134.
27. Eberhardt M., McLaren J., Millington A., Wilkinson B. Multiple forces in component localisation in China. European Management Journal 2004, 22:290-303.
28. Ellram L.M. Activity-based costing and total cost of ownership: a critical linkage. Journal of Cost Management 1995, 8:22-30.
29. Ellram L.M., Siferd S. Purchasing: the cornerstone of the total cost of ownership concept. Journal of Business Logistics 1993, 14. 163-163.
30. Ferrin B., Plank R. Total cost of ownership models: an exploratory study. Journal of Supply Chain Management 2002, 38:18-29.
31. Fisher R.J. Social desirability bias and the validity of indirect questioning. Journal of Consumer Research 1993, 20:303-315.
32. Frear C., Metcalf L., Alguire M. Offshore sourcing: its nature and scope. International Journal of Purchasing and Materials Management 1992, 28:2-11.
33. Ghalayini A.M., Noble J. The changing basis of performance measurement. International Journal of Operations & Production Management 1996, 16:63-80.
34. Ghoshal S. Environmental scanning in Korean firms: organizational isomorphism in action. Journal of International Business Studies 1988, 19:69-86.
35. Giudici P. Applied Data Mining 2003, John Wiley and Sons, Padova.
36. Haenecke H. Methodenorientierte Systematisierung Der Kritik an Der Erfolgsfaktorenforschung [Method based systematisation of the criticism of success factor research]. Zeitschrift für Betriebswirtschaft 2002, 72:165-184.
37. Handfield R.B. U.S. global sourcing: patterns of development. International Journal of Operations & Production Management 1994, 14:40-51.
38. Heckscher E. The Effect of Foreign Trade on the Distribution of Income, Readings in the Theory of International Trade 1919, Blackeston, Philadelphia, PN.
39. Hofstede G. Culture's Consequences: Comparing Values, Behaviors 2001, Institutions, and Organizations across Nations. Sage Publications, Thousand Oaks, CA.
40. Holweg M., Reichhart A., Hong E. On risk and cost in global sourcing. International Journal of Production Economics 2010, 131:333-341.
41. Homburg C., Krohmer H., Cannon J., Kiedaisch I. Customer satisfaction in transnational buyer-supplier relationships. Journal of International Marketing 2002, 10:1-29.
42. Hoopes D.G., Postrel S. Shared knowledge, "Glitches" and product development performance. Strategic Management Journal 1999, 20:837-865.
43. Horwell R., Soucy S. Determining the real costs of doing business in a global market. National Productivity Review 2007, 10:157-165.
44. Hultman J., Johnsen T., Johnsen R., Hertz S. An interaction approach to global sourcing: a case study of ikea. Journal of Purchasing & Supply Management 2012, 18:9-21.
45. Innes J., Mitchell F. A Practical Guide to Activity-Based Costing 1998, Kogan Page, London, UK.
46. Kaufmann L., Carter C.R. International supply relationships and non-financial performance-a comparison of U.S. and German practices. Journal of Operations Management 2006, 24:653-675.
47. Kern T., Willcocks L.P., Van Heck E. The winner's curse in I.T. outsourcing: strategies for avoiding relational trauma. California Management Review 2002, 44:47-69.
48. Ketokivi M.A., Schroeder R. Perceptual measures of performance: fact or fiction?. Journal of Operations Management 2004, 22:247-264.
49. Kieser A. Rhetoric and myth in management fashion. Organization 1997, 4:49-74.
50. Kinkel S., Maloca S. Drivers and antecedents of manufacturing offshoring and backshoring-a German perspective. Journal of Purchasing & Supply Management 2009, 15:154-165.
51. Kogut B. Designing global strategies: comparative and competitive value-added chains. Sloan Management Review 1985, 26:15-28.
52. Kotabe M. Efficiency vs. effectiveness orientation of global sourcing strategy: a comparison of U.S. and Japanese multinational companies. The Academy of Management Executive 1998, 12:107-119.
53. Kotabe M., Mol M.J. International sourcing: redressing the balance. Handbook of Global Supply Chain Management 2006, 393-406. Sage Publications, London, UK. J.T. Mentzer, M.B. Myers, T.P. Stank (Eds.).
54. Kotabe M., Mol M.J., Murray J.Y. Global sourcing strategy. The Sage Handbook of International Marketing 2009, Sage Publications Ltd, London. M. Kotabe, K. Helsen (Eds.).
55. Kotabe M., Mudambi R. Global sourcing and value creation: opportunities and challenges. Journal of International Management 2009, 15:121-125.
56. Kotabe M., Murray J.Y., Javalgi R.G. Global sourcing of services and market performance: an empirical investigation. Journal of International Marketing 1998, 6:10-31.
57. Kotabe M., Omura G. Sourcing strategies of European and Japanese multinationals: a comparison. Journal of International Business Studies 1989, 20:113-130.
58. Lacity M.C., Hirschheim R. Beyond the Information Systems Outsourcing Bandwagon: The Insourcing Response 1995, John Wiley & Sons, Inc., New York, NY.
59. Lacity M.C., Khan S., Yan A., Willcocks L.P. A review of the I.T. outsourcing empirical literature and future research directions. Journal of Information Technology 2010, 25:395-433.
60. Levy D. International sourcing and supply chain stability. Journal of International Business Studies 1995, 26:343-360.
61. Lockström, M., 2007. Low-Cost Country Sourcing: Trends and Implications. DUV, Gabler Edition Wissenschaft, Wiesbaden, Germany.
62. MacCarthy B.L., Atthirawong W. Factors affecting location decisions in international operations, a delphi study. International Journal of Operations & Production Management 2003, 23:794-819.
63. March J., Simon H., Guetzkow H. Organizations 1958, John Wiley and Sons, New York, NY.
64. Meixell M., Gargeya V. Global supply chain design: a literature review and critique. Transportation Research Part E: Logistics and Transportation Review 2005, 41:531-550.
65. Mol M.J., Pauwels P., Matthyssens P., Quintens L. A technological contingency perspective on the depth and scope of international outsourcing. Journal of International Management 2004, 10:287-305.
66. Mol, M.J., van Tulder, R.J.M., Beije, P.R., 2002. Global Sourcing Fact or Fad. ERIM Report Series Reference Number ERS-2002-55-ORG. 1, 1-31.
67. Mol M.J., Van Tulder R.J.M., Beije P.R. Antecedents and performance consequences of international outsourcing. International Business Review 2005, 14:599-617.
68. Monczka R.M., Giunipero L.C. International purchasing: characteristics and implementation. The International Executive 1985, 27:2-9.
69. Murray J.Y., Kotabe M., Wildt A.R. Strategic and financial performance implications of global sourcing strategy: a contingency analysis. Journal of International Business Studies 1995, 26:181-202.
70. Nassimbeni G., Sartor M. Sourcing in China: a typology. International Journal of Production Economics 2007, 107:333-349.
71. Neely A., Richards H., Mills J., Platts K., Bourne M. Designing performance measures: a structured approach. International Journal of Operations & Production Management 1997, 17:1131-1152.
72. Nellore R., Chanaron J., Söderquist E. Lean supply and price-based global sourcing-the interconnection. European Journal of Purchasing & Supply Management 2001, 7:101-110.
73. Nollet J., Calvi R., Audet E., Côté M. When excessive cost savings measurement drowns the objectives. Journal of Purchasing & Supply Management 2008, 14:125-135.
74. Ohlin B. Interregional and International Trade. Cambridge, MA 1933, Harvard University Press.
75. Petersen K.J., Prayer D.J., Scannell T.V. An empirical investigation of global sourcing strategy effectiveness. The Journal of Supply Chain Management 2000, 36:29-38.
76. Porter M. The Competitive Advantage of Nations: With a New Introduction 1990, Free Press, New York, NY.
77. Quintens L., Matthyssens P., Faes W. Purchasing internationalisation on both sides of the atlantic. Journal of Purchasing & Supply Management 2005, 11:57-71.
78. Quintens L., Pauwels P., Matthyssens P. Global purchasing: state of the art and research directions. Journal of Purchasing & Supply Management 2006, 12:170-181.
79. Sakurai M. Target costing and how to use it. Emerging Practices in Cost Management 1990, Lamont, Boston, MA. B.J. Brinker (Ed.).
80. Salmi A. Organising international supplier relations: an exploratory study of western purchasing in China. Journal of Purchasing & Supply Management 2006, 12:197-208.
81. Schiele H. Supply-management maturity, cost savings and purchasing absorptive capacity: testing the procurement-performance link. Journal of Purchasing & Supply Management 2007, 13:274-293.
82. Schiele H., Horn P., Vos B. Estimating cost-saving potential from international sourcing and other sourcing levers: relative importance and trade-offs. International Journal of Physical Distribution & Logistics Management 2011, 41:315-336.
83. Schoenherr T. Logistics and supply chain management applications within a global context: an overview. Journal of Business Logistics 2009, 30:1-25.
84. Schumacher S., Contzen M., Schiele H., Zachau T. Die 3 Faktoren Des Einkaufs: Einkauf Und Lieferanten Strategisch Positionieren [the Three Factors of Purchasing: Strategic Positioning of Purchasing and Suppliers] 2008, Wiley-VCH Verlag, Weinheim.
85. Schweller R. Bandwagoning for profit: bringing the revisionist state back. International Security 1994, 19:72-107.
86. Smith J. Item selection for global purchasing. European Journal of Purchasing & Supply Management 1999, 5:117-127.
87. Spekman R. U.S. buyers' relationships with pacific rim sellers. International Journal of Purchasing and Materials Management 1991, 27:1-10.
88. Spender J. Industry Recipes: An Enquiry into the Nature and Sources of Managerial Judgement 1989, Basil Blackwell Cambridge, MA.
89. Steinle C., Schiele H. Limits to global sourcing? Strategic consequences of dependency on international suppliers: cluster theory, resource-based view and case studies. Journal of Purchasing & Supply Management 2008, 14:3-14.
90. Taylor M., Taylor A. Operations management research in the automotive sector. International Journal of Operations & Production Management 2008, 28:480-489.
91. Trautmann G., Bals L., Hartmann E. Global sourcing in integrated network structures: the case of hybrid purchasing organizations. Journal of International Management 2009, 15:194-208.
92. Trent R.J. Individual and collective team effort: a vital part of sourcing team success. International Journal of Purchasing and Materials Management 1998, 34:46-54.
93. Trent R.J., Monczka R.M. Understanding integrated global sourcing. International Journal of Physical Distribution & Logistics Management 2003, 33:607-629.
94. Tversky A., Kahneman D. Judgment under uncertainty: heuristics and biases. Science 1974, 185:1124-1131.
95. Venkatraman N., Ramanujam V. Measurement of business performance in strategy research: a comparison of approaches. Academy of Management Review 1986, 11:801-814.
96. Verband der Automobilindustrie, V.D.A., 2004. Future Automotive Industry Structure (Fast) 2015-Die Neue Arbeitsteilung in Der Automobilindustrie [the New Division of Labor in the Automotive Industry]. Mercer Management Consulting, Lexington, MA.
97. Verband der Automobilindustrie, V.D.A., 2010. Annual Statistic Report-German Association of the Automotive Industry Publications, Berlin.
98. von Corswant F., Fredriksson P. Sourcing trends in the car industry. International Journal of Operations & Production Management 2002, 22:741-758.
99. Wagner B., Macbeth D., Boddy D. Improving supply chain relations: an empirical case study. Supply Chain Management: An International Journal 2002, 7:253-264.
100. Wallentowitz H., Freialdenhoven A., Olschewski I. Strategien in Der Automobilindustrie. Technologietrends Und Marktentwicklungen [Strategies in the Automotive Industry, Technological Trends and Market Developments] 2009, Vieweg und Teubner, Wiesbaden.
101. Weber M., Hiete M., Lauer L., Rentz O. Low cost country sourcing and its effects on the total cost of ownership structure for a medical devices manufacturer. Journal of Purchasing &Supply Management 2010, 16:4-16.
102. Whitley R. The social construction of organizations and markets: the comparative analysis of business recipes. Rethinking Organizations: New Directions in Organization Theory and Analysis 1992, Sage Publications Ltd, London. M. Reed, M. Hughes (Eds.).