Global operations and their interaction with supply chain performance

Abstract

PurposeA major part of economic globalization has taken place in the form of different globalization strategies. Offshoring and outsourcing of manufacturing activities from Western locations to Eastern Europe and the Far East are used to remain competitive. Such strategies have implications for supply chain performance. The purpose of this paper is to explore whether supply chain performance is affected differently depending on the choice of globalization strategy.Design/methodology/approachThe paper is based on in‐depth literature reviews and explorative case studies – two offshoring and two outsourcing projects. A model explaining the choice of localization and globalization strategy (the OLI model) is applied as a basic framework. Data have been collected through in‐depth interviews with persons responsible for the offshoring and outsourcing projects.FindingsThe paper addresses different practices of managing supply chain performance in offshoring and outsourcing strategies. The OLI model provides an increased consciousness of the managerial challenges related to supply chain performance based on the chosen globalization strategy.Research limitations/implicationsThe paper is explorative in nature and is based on four case studies. The paper provides no basis for statistical generalizations.Practical implicationsThe supply chain performance is affected both positively and negatively in each type of globalization strategy. The OLI model provides an extended understanding of the factors that should be considered in decision processes concerning offshoring and outsourcing.Originality/valueIn this paper, the OLI model is integrated in a new understanding of supply chain performance.