Global Sourcing

By

Subroto Roy Ph.D.

University of New Haven
Website and Blog : www.stratoserve.com
Email: Dr.SubrotoRoy@gmail.com

Overview
• Supply Management Evolution
• The Firm and its Boundaries
• International Purchasing vs. Global Sourcing
• Excellence in Global Sourcing
• India Opportunities
• Global Supplier Relationship management
• Managing privacy and Intellectual Property in
Global Sourcing
• Global Cultures
• Summary
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 Supply Management Evolution
• 1920’s Ford Rouge Plant – no real
purchasing function…
• 1939… the war boom years difficult to
scale up production .. purchasing evolves
• Till Berlin wall (1989) and Soviet collapse
(1991) need to prove “free markets” –
buyer-seller relations are adverse…

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Supply Mgmt. After 1991

• 1993- Jack Welch and GE – Session C reviews
– Mid level Purchasing to Strategic Sourcing.
• 1995 Internet- Globalization
• 2001: 911
• Judith Ross (2005) HBR- Supply Chain Strategy
70% in materials and parts purchased.
• “The World is Flat” Thomas Friedman (2005)

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June 2006 CAPM Survey …..

91% Supply
Management
Professionals felt
that SM is
becoming more
important…

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Supply
Management

Supplier Firm Distributor

Marketing
Customer
and Sales

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International vs. Global

Source: Trent&Monczka,2005- MIT Sloan Mgmt. Review

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Source: Trent&Monczka,2005- MIT Sloan Mgmt. Review

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Source: Trent&Monczka,2005- MIT Sloan Mgmt. Review
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Source: Trent&Monczka,2005- MIT Sloan Mgmt. Review

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Source: Trent&Monczka,2005- MIT Sloan Mgmt. Review
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Source: Trent&Monczka,2005- MIT Sloan Mgmt. Review

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Source: Trent&Monczka,2005- MIT Sloan Mgmt. Review

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Source: Trent&Monczka,2005- MIT Sloan Mgmt. Review

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 Relationships and IP

• Supplier Relations- say and do the right

thing !
– Auto and aerospace take one supplier
drawing and give to another supplier?
• Result….
– Aerospace supplier supplies directly to after
market.

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Source
Dwyer,Schurr
and Oh(987)

Can we
understand
and link the
purchasing
process to this
diagram?

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Source: Subroto Roy (2005 – with K Sivakumar and 2006- with Amit Sheth,
K.Sivakumar, Budak Arpinar)

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Source: Subroto Roy & K. Sivakumar 2005

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 Balanced Metrics for
Supplier
Performance
Going Beyond Price……
• Quality
• Delivery History
• Continuous improvement-

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“Silent Language” Ed Hall

• Is the Culture Deal focused or
relationship focused ?
• Direct or indirect contextual
communication?
• Punctuality?
• Personal physical space-

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 Geert Hofstede

• Power Distance Index (PDI)

• Individualism (IDV)
• Masculinity (MAS)
• Uncertainty Avoidance
Index (UAI)
• Long Term Orientation
(LTO)

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Summary
• Supply Management Evolution
• The Firm and its Boundaries
• International Purchasing vs. Global Sourcing
• Excellence in Global Sourcing
• India Opportunities
• Global Supplier Relationship management
• Managing privacy and Intellectual Property in
Global Sourcing
• Global Cultures
• Summary
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Educational Exhibition

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Questions – Comments?
Thank You!
And watch for updates at my blog
www.stratoserve,com
Email: Dr.SubrotoRoy@gmail.com

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