Alignment of global supply networks based on strategic groups of supply chains

• Main Authors: Nikos G. Moraitakis, Jiazhen Huo, Hans-Christian Pfohl
• Format: Article
• Language: English
• Published: Poznań School of Logistics 2017-09-01
• Series: LogForum
• Subjects: supply chain management; global supply networks; supply network segmentation; supply network alignment; strategic groups; strategic sourcing
• Online Access: http://www.logforum.net/vol13/issue3/no7/13_3_7_17.pdf

Background: From a supply chain perspective, often big differences exist between global raw material suppliers’ approaches to supply their respective local markets. The progressing complexity of large centrally managed global supply networks and their often-unknown upstream ramifications increase the likelihood of undetected bottlenecks and inefficiencies. It is therefore necessary to develop an approach to strategically master the upstream complexity of such networks from a holistic supply chain perspective in order to align regional competitive priorities and supply chain structures. The objective of this research is hence to develop an approach for the supply-chain-based alignment of complex global supply networks. Method: We review existing literature from the fields of supply chain and network management, strategic sourcing, and strategic management. Based on the literature review and theoretical and practical considerations we deduce a conceptual approach to consider upstream supply chain structures in supply network alignment initiatives. Results: On the basis of these considerations and current empirical literature we transfer strategic group theory to the supply network management context. The proposed approach introduces strategic groups of supply chains as a segmentation criterion for complex global supply networks which enables the network-wide alignment of competitive priorities. Conclusion: Supply-chain-based segmentation of global supply network structures can effectively reduce the complexity, firms face when aiming to strategically align their supply chains on a holistic level. The results of this research are applicable for certain types of global supply networks and can be used for network alignment and strategy development. The approach can furthermore generate insights useable for negotiation support with suppliers.