Disturbances to the supply chains of high-value manufacturing firms: comparison of the perceptions of product managers and supply chain managers

Abstract

We draw on the literature to categorise the supply chain disturbances (risks and uncertainties) that affect high-value manufacturing (HVM) firms when adopting the following two sourcing strategies: (a) insourcing/nearshore outsourcing, and (b) outsourcing/offshoring. We build a hierarchy structure of disturbances, which was tested in a case study of a European HVM operating in the aerospace industry. A novelty of this study is the quantitative prioritisation and comparison, using the analytic hierarchy process (AHP) method, of the disturbances reported by two groups of managers: three product managers (internally facing) and four supply chain managers (externally facing). Our findings show that managers' perceptions of firmrelated, network-related and location-related disturbances can be prejudiced by their functional boundaries. We show that both product and supply chain managers prefer the insource/nearshore outsource strategy, as they feel that the disturbances while outsourcing/offshoring are significantly greater and offset the benefits of low-cost production -a counterintuitive finding. Through in-depth interviews with both groups of managers, we found the mitigation strategies are reshoring, full consideration to the total cost of acquisition (including hidden costs of distant operations) and building clusters in emerging markets to support the firm's regional hub by partnering with its existing suppliers from developed countries.

Reshoring: A Road to Industry 4.0 Transformation

“…Reshoring can result from geopolitical tremors that disrupt businesses operating in both global and local domains (Butzbach, Fuller and Schnyder, 2020). Disruptions of any kind prompt managers to explore cost‐effective options for managing their supply chains while ensuring superior control over quality and operations (De Lima and Seuring, 2023; Huq, Pawar and Subramanian, 2021; McMaster et al. , 2020).…”

“…Reshoring can result from geopolitical tremors that disrupt businesses operating in both global and local domains (Butzbach, Fuller and Schnyder, 2020). Disruptions of any kind prompt managers to explore cost-effective options for managing their supply chains while ensuring superior control over quality and operations (De Lima and Seuring, 2023;Huq, Pawar and Subramanian, 2021;McMaster et al, 2020). Reshoring from markets with high sales potential presents a significant challenge for managers, as the decision may lead to either a loss of sales or an increase in selling costs (Baraldi, Ciabuschi and Fratocchi, 2022;Barbieri et al, 2022;Boffelli et al, 2020).…”

Impeding factors for the generation of collaborative innovation performance in ecosystem-based manufacturing

“…Like the global financial crisis in 2008, the most recent COVID-19 pandemic has highlighted the need to have a more resilient local manufacturing capability due to international supply chain disturbances (Huq et al. , 2021).…”

“…, 2021). The competitive threat of cheaper substitute products from China led the UK government to develop a high-value manufacturing strategy (Huq et al. , 2021).…”

“…Like the global financial crisis in 2008, the most recent COVID-19 pandemic has highlighted the need to have a more resilient local manufacturing capability due to international supply chain disturbances (Huq et al, 2021). The competitive threat of cheaper substitute products from China led the UK government to develop a high-value manufacturing strategy (Huq et al, 2021). Based on this strategy, the UK government has started several strategic initiatives while recognising the importance of collaborative innovation in manufacturing, e.g.…”