Economic clusters and the supply chain: a case study

Abstract

PurposeThe purpose of the study is to illustrate the advantages for firms who build local supplier and customer relationships whenever possible.Design/methodology/approachA case study of a US petrochemical firm is used along with a discussion of Porter's economic cluster theory.FindingsThe firm outsourced two raw materials first to a firm about 200 miles away and then to a firm that built a plant across the street. By sourcing to a co‐located firm the company reduced its costs by $280,000 per year while simultaneously increasing quality by 6.5 per cent, reducing lead‐time by seven to ten days, and reducing raw material inventory from 800 tons to 30 tons.Research limitations/implicationsAs with all case studies, care must be taken when generalizing the findings of this study. This article provides empirical evidence that supports Porter's economic cluster theory.Practical implicationsManagers are reminded that even in the age of the global business environment, there is still practical value in constructing local supply chains. Government officials who are in charge of economic development are shown the value of targeting clusters of economic activity.Originality/valueThis article provides empirical evidence that supports Porter's economic cluster theory and has practical implications for managers and government officials.

Coordination in humanitarian logistics through clusters

“…In line with this, Patti (2006) assumed that clusters include upstream and downstream customers and often "extend horizontally to makers of similar and complementary products that require the same basic skills, raw materials, and specialized equipment" (p. 266). Clusters benefit from competition and cooperation through increased productivity because they provide better access to employees, suppliers, public institutions and specialised information, increased availability of complementary products and services, and better motivation and measurement (Patti, 2006, p. 267).…”

A Review on the Integration of Supply Chain Management and Industrial Cluster

“… Importance of CSC: To demonstrate the linkage between supply chain and industrial cluster theories. Some articles provide evidence on the integration of these two independent disciplines increase the competitive advantage of industries and firm performance (for example, DeWitt et al, 2006;Patti, 2006;Sadler, 2007;Bozarth et al, 2007;Sureephong et al, 2008;Han, 2009;Nicolini et al, 2010;Bardy, 2010; T.G. Bosona & G. Gebresenbet,2011).…”

Strategic analysis of cluster of logistics services

“…Karaev et al (2007) y Enrigh (1998) identifican las precondiciones para la formación de cluster y los beneficios percibidos por la competitividad , como el aumento de la producción especialización, la innovación (productos y procesos), costos, confianza, exportaciones y normalización de productos. Según Patti (2006) hay un aumento de la productividad de los miembros del cluster debido al acceso de a los empleados y http://www.revistaespacios.com/ 3/14 proveedores, información e instituciones públicas especializadas, mayor disponibilidad de productos y servicios complementarios y una mejor motivación y medición. La Metodología de Análisis Competitivo (Salas & Cortabarría, 2014) aborda 9 factores: organización, direccionamiento estratégico, gestión de mercados, logísitca, calidad, producción, gestión financiera, gestión del talento humano e innovación; con el propósito de analizar la estructura interna de la organización y su desarrollo en un entorno altamente competitivo.…”