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Flexibility constraints of global value chains : the (re-)emergence of local value chains?

Paper presented at 23rd International Annual EurOMA Conference. Trondheim, Norway, 17th-22nd June 2016
: Kinkel, Steffen; Rieder, Bernhard; Horvat, Djerdj; Jäger, Angela

2016, 10 pp.
European Operations Management Association (EurOMA International Annual Conference) <23, 2016, Trondheim>
Conference Paper
Fraunhofer ISI ()
Global value chains; Local supply chains; Global sourcing
Anfrage beim Institut / Available on request from the institute

This paper presents an empirical investigation of the advantages and disadvantages of global vs. local value chains. A regression analysis of German firm-level data shows no significant impact of global sourcing on total factor productivity. The cost reduction potentials of global sourcing seem to be offset by higher spending on coordination and control in order to ensure flexible reaction and delivery in the supply chain. Lower price segments and large batches tend to be purchased from suppliers in the Far East, but they are usually not flexible enough to provide varying or customer-specific components.