Do not forget the strategic architecture of your manufacturing network while offshoring

Offshoring manufacturing to low labor cost countries has become trendy. Nearly everyday one sees an announcement in the business press of companies moving to China or India. Whilst production cost is an important consideration in choosing a location for the factory, we argue that one should not become victim of a herd effect and that other parameters e.g. quality, flexibility, transportation and energy costs, etc. need to be taken into consideration in the determination of the optimal manufacturing network. Relocating a factory is changing the strategic architecture of the company's manufacturing network and requires a long term view and a good model to design the architecture of the manufacturing network. Based on empirical survey research and a set of case studies we provide such a model to think about the roles of factories in the strategic manufacturing network of the firm. But we go beyond a classification and a descriptive model and we provide a set of six managerial issues that require senior management's attention in determining the optimal manufacturing network and its dynamic evolution. We argue for example that senior management needs to build a balanced portfolio of different types of factories, has to have a performance measurement system adapted to the type of factory, as well as the appropriate leadership for each of the different types of factories and needs to actively manage the dynamics and the flows of innovation in the factory network. Key words: international manufacturing, network management, outsourcin

The predictive value of behavioural characteristics on the succes of strategic alliances

An increasing number of companies are setting up strategic alliances with suppliers and customers. However, the majority of these alliances do not succeed. Our aim is to understand how different behavioural characteristics are associated with alliance success. We hypothesise that alliance attributes, communication behaviour, and alliance management are predictors of cost benefits and service benefits. Furthermore, we found that while alliance attributes are related with both cost and service benefits, communication behaviour and alliance management are only associated with service and cost benefits, respectively. We also see that alliance attributes explain most of the variance of supply chain success and are thus better predictors of alliance success than other behavioural characteristics. Furthermore, we provide insight into the way managers can build up supply chain performance by setting up strategic alliances

The strategic role of the plant: testing Ferdows's model

This paper was published in International Journal of Operations & Production Management, 22(5), 2002, 492-514 and has been selected as the most "Outstanding Paper for 2002: Award of Excellence" by the editor and editorial team of IJOPM