Many firms have responded to the globalization of business by developing international supply chains1 in which the various value-adding activities comprising a finished product are dispersed geographically in a number of countries.2 At the same time, many businesses have tried to understand and implement lean production systems, pioneeered by Toyota, that encompass goals such as just-in-time (JIT) delivery, low inventories, zero defects, flexible production in small batches, and close technical cooperation with suppliers. While the business press has championed both globalization and lean production as inevitable and valuable, there has been little investigation into the interaction of the two. Are they compatible? Or will they collide?3
Managers are, of course, aware of the logistical problems in operating international value chains, such as longer lead times and higher transportation costs.4 Some writers have challenged the benefits available from international sourcing and have raised strategic concerns, such as the potential for “hollowing out” the corporation.5 Nevertheless, many writers optimistically presume that technological advances in communication and transportation are quickly scaling the barriers of distance.6
In a study of a company in the personal computer industry, I examined the implementation of lean production in an international value chain. The study demonstrates that the rapid flow of goods and information required by... To read the complete article, login or sign-up using the form below.
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