Global Dual Sourcing
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Global Dual Sourcing
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Author : Gad Allon
language : en
Publisher:
Release Date : 2013
Global Dual Sourcing written by Gad Allon and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.
When designing a sourcing strategy in practice, a key task is to determine the average order rates placed to each source because that affects costs and supplier management. We consider a firm that has access to a responsive near-shore source (e.g., Mexico) and a low-cost offshore source (e.g., China). The firm must determine an inventory sourcing policy to satisfy random demand over time. Unfortunately, the optimal policy is too complex to allow a direct answer to our key question. Therefore, we analyze a tailored base-surge (TBS) sourcing policy that is simple, used in practice, and captures the classic trade-off between cost and responsiveness. The TBS policy combines push and pull controls by replenishing at a constant rate from the offshore source and producing at the nearshore plant only when inventory is below a target. The constant base allocation allows the offshore facility to focus on cost efficiency, whereas the nearshore facility's quick response capability is utilized only dynamically to guarantee high service. The research goals are to (i) determine the allocation of random demand into base and surge capacity, (ii) estimate the corresponding working capital requirements, and (iii) identify and value the key drivers of dual sourcing. We present performance bounds on the optimal cost and prove that economic optimization brings the system into heavy traffic. We analyze the sourcing policy that is asymptotically optimal for high-volume systems and present a simple "square-root" formula that is insightful to answer our questions and sufficiently accurate for practice, as is demonstrated with a validation study.
Global Dual Sourcing Strategy
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Author : Nurakmal Ahmad Mustaffa
language : en
Publisher:
Release Date : 2015
Global Dual Sourcing Strategy written by Nurakmal Ahmad Mustaffa and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
Global Dual Sourcing And Order Smoothing
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Author : Robert N. Boute
language : en
Publisher:
Release Date : 2015
Global Dual Sourcing And Order Smoothing written by Robert N. Boute and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
After decades of offshoring production across the world, companies are rethinking their global networks. Local sourcing is receiving more attention, but it remains challenging to balance the offshore sourcing cost advantage against the increased inventories due to its longer leadtime, and against the cost and (volume-)flexibility of each source's capacity. To guide strategic allocation in this global network decision, this paper establishes reasonably simple prescriptions that capture the key drivers. We adopt a conventional discrete-time inventory model with a linear control rule that smoothes orders and allows an exact and analytically-tractable analysis of single and dual sourcing policies under normal demand. Distinguishing features of our model are that it captures each source's leadtime, capacity cost and flexibility to work overtime. We use Lagrange's inversion theorem to provide exact and simple square-root bound formulae for the strategic sourcing allocations and the value of dual sourcing. The formulae provide structural insight on the impact of financial, operational and demand parameters, and a starting point for quantitative decision making. We investigate the robustness of our results by comparing the smoothing policy with existing single and dual sourcing models in a simulation study that relaxes model assumptions.
The Mexico China Sourcing Game
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Author : Gad Allon
language : en
Publisher:
Release Date : 2016
The Mexico China Sourcing Game written by Gad Allon and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
We describe a three-hour class on global dual sourcing built around a game that demonstrates the challenges in making operational decisions, and transfers recent academic insights to the classroom. Student teams manage a firm with access to a responsive but expensive supply source (Mexico) and a cheap but remote source (China). Each team must determine a sourcing strategy to satisfy random demand that is revealed throughout the game. In each period, teams place orders to both sources and manage two assets: inventory and their bank account. The goal is to maximize each team's value (final bank balance). During the debriefings, we analyze the policies used by different teams along both financial and operational metrics, present the optimal strategy, and summarize the experiential learning points.
The Economic And Environmental Sustainability Of Dual Sourcing
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Author : Heidrun Rosič
language : en
Publisher: Peter Lang Gmbh, Internationaler Verlag Der Wissenschaften
Release Date : 2012
The Economic And Environmental Sustainability Of Dual Sourcing written by Heidrun Rosič and has been published by Peter Lang Gmbh, Internationaler Verlag Der Wissenschaften this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with Business categories.
Supply chains consist of all processes which are needed in order to supply customers with the required products. This book shows how the performance of supply chains can be evaluated considering both economic and environmental criteria. It deals with dual sourcing in the context of the newsvendor model.
Dual Sourcing And Resilient Supply Chains
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Author : Thomas Gehrig
language : en
Publisher:
Release Date : 2022
Dual Sourcing And Resilient Supply Chains written by Thomas Gehrig and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022 with Business logistics categories.
We characterize strategic technology investments in essential resources. With a monopoly supplier dual sourcing is a strategy to reduce switching costs in the long-run. It serves as an insurance mechanism against future opportunism by providing access to competitive global markets. Investments in dual sourcing are required to limit abuse of market power by the active source provider, even though the option of dual sourcing may not be exercised in equilibrium. Our analysis has implications for the European natural gas market. LNG-terminals may serve a strategic purpose of limiting ex-post opportunism even when delivering gas by pipeline is more efficient.
Global Sourcing The Strategic Reorientation Of Purchasing
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Author : Wolfgang Schneid
language : en
Publisher: GRIN Verlag
Release Date : 2010-05-08
Global Sourcing The Strategic Reorientation Of Purchasing written by Wolfgang Schneid and has been published by GRIN Verlag this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-05-08 with Business & Economics categories.
Seminar paper from the year 2004 in the subject Business economics - Supply, Production, Logistics, grade: 1,3, Heidenheim University of Cooperative Education, course: International Management, language: English, abstract: "Es ist nicht genug zu wissen, man muß es auch anwenden; Es ist nicht genug zu wollen, man muß es auch tun." Goethe Globalisation of markets progresses rapidly and leads to more competition. In times of Supply Chain Management, Cost Saving Measures and Outsourcing companies have to reorient their business planning. New concepts are necessary to reach a cost efficient production. In this context, globalisation must not only be considered as global selling of own products. With the same effort global logistics and procurement have to be taken into account to gain global success. Global Sourcing is already known as conscious orientation of a purchasing strategy. However, its implementation hasn't gone far yet. Increasing economical interweaving and better technological possibilities make Global Sourcing, even for middle-class companies more relevant than never before. Global Sourcing is more than just buying goods and services in foreign countries. In bounds of company philosophy, efficient strategies have to be developed to ensure international competitiveness. Extending of purchasing options, access to world-wide know-how or even increasing sales of own products are just some features of this concept. Before integrating the Global Sourcing Concept in other company strategies a closer look is necessary. The focus of this term paper remains in showing Global Sourcing as a part of the reorientation of purchasing, determining its features and risks as well as indicating the strategy of Global Sourcing. For not going beyond the scope of this work, I will refrain from exact determination of every single sourcing strategy (Sourcing Toolbox). Even it's not its task to set exact guidelines, concerning the integration into company's strategies. Addition
Strategic Analysis Of Dual Sourcing And Dual Channel With An Unreliable Alternative Supplier
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Author : Niu Baozhuang
language : en
Publisher:
Release Date : 2020
Strategic Analysis Of Dual Sourcing And Dual Channel With An Unreliable Alternative Supplier written by Niu Baozhuang and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
In today's increasingly interconnected world, co-opetition has emerged as a new business practice among the technology firms. The boundaries between cooperation and competition have been becoming vague, where rivals engage in collaborative activities. One of the most critical challenges facing the co-opetitive supply chain concerns with the sourcing strategy. This study develops an analytical model to investigate the strategic decision of the original equipment manufacturer (OEM) in the presence of a competitive supplier (i.e. frenemy) as well as a non-competitive supplier who nevertheless suffers from unreliable production technology. We find that the OEM always prefers the supplier diversification by engaging the additional non-competitive supplier although the non-competitive supplier experiences the yield uncertainty problem. Further, we show that the non-competitive supplier's expected profit is unimodal in its technology level in the dual sourcing scenario. This result suggests that the non-competitive supplier may not have incentives to further improve its production technology once it reaches a threshold. Finally, we investigate the credibility of competitive supplier's threat to stop supplying the components to OEM as a response of OEM's engagement of a new supplier. We show that the termination of component-selling business by competitive supplier is a non-credible threat to prevent OEM seeking the alternative supplier.
Managing Global Sourcing
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Author : Nitish Jain
language : en
Publisher:
Release Date : 2013
Managing Global Sourcing written by Nitish Jain and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.
The use of global suppliers has increased considerably over the last three decades. Operations management theory establishes that global sourcing requires more units of inventory, but since these units are often procured at a lower cost from global suppliers the capital invested in inventory and the consequent financial burden may increase or decrease with global sourcing. This study provides the first rigorous firm-level empirical evidence that links the global sourcing practices of public U.S. firms and their inventory investments. We process bill of lading manifests (customs forms) to extract information on over half a million sea shipments from global suppliers to U.S. public firms and link this information with quarterly financial data from the Compustat database. We provide stylized facts on the participation of dfferent firms and sectors in global trade. Using a simultaneous equation model, we find that an increase in global sourcing results in an increase in inventory investment. A 10% shift in sourcing from domestic to global suppliers increases the inventory investment by 8.8% for an average firm in our sample. We also find that increasing the number of suppliers can mitigate this increase in inventory investment: for example, going from single to dual sourcing reduces inventory investment by about 11%. We illustrate the use of our estimates to identify the impact of changing global sourcing strategy on inventory investment and operational performance metrics.
An Approximate Policy For A Dual Sourcing Inventory Model With Positive Lead Times And Binomial Yield
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Author : Wanrong Ju
language : en
Publisher:
Release Date : 2014
An Approximate Policy For A Dual Sourcing Inventory Model With Positive Lead Times And Binomial Yield written by Wanrong Ju and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
This paper studies the inventory system of a retailer who orders his products from two supply sources, a local one that is responsive and reliable, but expensive, and a global one that is low-cost but less reliable. The deliveries from the global source only partially satisfy the quality requirements. We model this situation with a dual-sourcing inventory model with positive lead times and random yield. We propose a dual-index order-up-to policy (DOP) based on approximating the inventory model with an unreliable supplier by a sequence of dual-sourcing models with reliable suppliers and suitably modified demand distributions. Numerical results show that the performance of this heuristic is close to that of the optimal DOP. Moreover, we extend the heuristic to models with advance yield information and study its impact on the total inventory costs.