T he 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 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 different 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.

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Problem definition: Fast recovery from sourcing interruptions is a key objective for global supply chains and for business continuity professionals. In this paper, we study the impact of different supply chain strategies—supplier diversification and the use of long-term relationships—on the ability of a supply chain to recover from sourcing interruptions. Academic/practical relevance: Improving supply chains’ recovery ability has been an important focus area for both practitioners and academics. Collectively, available anecdotal evidence and theoretical analyses provide ambiguous recommendations driven by competing effects of different sourcing strategies. Our paper provides the first rigorous and large-scale empirical evidence relating the use of different supply chain strategies to the ability of a supply chain to recover from supply interruptions. Methodology: We develop a compound estimator of a supply chain’s recovery rate that can be constructed using limited available data (only the time series of firms’ actual sourcing behavior). Using more than two and half million import manifests, we extract firms’ maritime sourcing transactions and use this data to estimate recovery rates of different firm-category supply chains of publicly traded U.S. firms. Results: We find that supplier diversification is associated with slower recovery from sourcing interruptions, whereas the use of long-term relationships is associated with faster recovery. A one standard deviation decrease in the former is associated with a 16% faster recovery, and a like increase in the latter is associated with a 20% faster recovery. Managerial implications: Our paper brings important empirical evidence to the hitherto theoretical debate on the impact of sourcing strategies on faster recovery in supply chains. We therefore provide actionable advice on supply chain design for faster recovery.

Problem definition: The mobile commerce (m-commerce) channel is poised to be the future of online markets. It offers search features distinct from conventional personal computer (PC)-based e-commerce channels. Its easy accessibility extends the time available for customers to search, although its shopping environment constraints (e.g., small screen size, single-tab browsing) may inflate search costs. Collectively, these competing features cause ambiguity about the mobile channel’s true effect on sales concentration—a key criterion in managing retail operations. The focus of this study is to understand the net impact of the mobile channel on driving sales concentration. Academic/practical relevance: Our study extends the empirical literature focusing on online retailers’ channel strategies and their implication on operations practice. It examines differences in primary online channels—mobile and PC—on shaping sales concentration across products and the cost of ignoring such a difference on inventory management, a core decision for operations managers. Methodology: We collaborate with a large online apparel retailer to access customer-level transactional data. We identify the mobile channel’s effect on sales concentration using a difference-in-differences strategy that leverages a quasi-experiment stemming from the retailer’s decision to discontinue its PC sales channel. Results: We find that the mobile channel increases the share of popular products by 6.4% compared with the PC channel. We also identify scenarios where ignoring this significant sales concentration difference will yield suboptimal inventory stocking by 4.2%–12.9%. Managerial implications: Our paper highlights that the mobile and PC channels have different sales concentrations because of different search features. Ignoring this difference affects inventory decisions, such as safety and cycle inventory levels. Therefore, it is imperative for managers to revise their status quo strategies, such as on inventory procurement, assortment planning, and product display, when integrating m-commerce with e-commerce.

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