- Research Highlight
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Does vertical integration make sense, particularly when an industry is moving offshore to regions of cheaper labor?
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As companies rely increasingly on external suppliers, there is an emerging and compelling need for “maestros”
A comparison of two Mexican factories suggests that global companies should go beyond monitoring codes of conduct and attack the problem of poor working conditions at its source by collaborating with their suppliers to implement new management systems.
Many manufacturers have established product development activities in different countries around the world. Yet their senior managers often struggle to tie those decentralized organizations into a cohesive, unified operation that can efficiently drive growth and innovation. New empirical frameworks may help unlock practices with which managers can deploy well-coordinated global product development strategies.
An organization’s ability to recover from disruption quickly can be improved by building redundancy and flexibility into its supply chain. While investing in redundancy represents a pure cost increase, investing in flexibility yields many additional benefits for day-to-day operations.
The authors examine the theoretical and practical problems associated with trade promotions, and they explain how the right kind of deal can be created — a transparent system that generates mutual trust and provides benefits to both manufacturers and retailers. The key is proper implementation of what is thus far a little understood tool: the pay-for-performance trade promotion, in which retailers get rewarded according to how much they sell, not how much they buy.
Companies lose money because they treat pollution control and plant operations as separate concerns. It costs less in the long run to make environmental and plant managers true partners in finding compliance solutions.
Trade promotions permit manufacturers to influence retail price, retail sales, and total channel profit by rewarding resellers for lower prices and subsidizing their selling effort.
In a global supply chain, managers must plan for longer lead times, expensive air freight, higher inventory levels, poor sales-forecasting accuracy, and significant delays in resolving technical problems. However, the reduction of defects and engineering change orders associated with lean production can stabilize the supply chain.
The persistent U.S. trade imbalance may have two causes: a declining manufacturing base and the shift of the U.S. economy toward services. Correcting the imbalance will require a substantial commitment to expand America’s manufacturing base.
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