Managing Supply Chain Risks

The Example of Successful Sourcing from China (diss.)

Researcher:

Josef Oehmen

Financed by:

The Professorship's own resources

Motivation:

China today is the most important newly industrialized country in the world. It is also one of the most important sourcing markets and a rapidly developing sales market.  This development is reflected in the interest of many Swiss and German companies to become more active and act more professionally in the Chinese sourcing market.

Objectives:

This project addresses four areas: the importance of supply chain risk management in global sourcing, the development of specific supply chain risk management  methods, the supply chain risks, and their mitigation measures when sourcing from China. Although the focus of the project is on companies that source from China for their production in Europe, it is in large parts also applicable for companies that source and/or produce locally in China.
Recent developments due to globalization, the role of the comparative advantage as a main driver for global sourcing, and the current state and developments in China are briefly considered. The relevance of supply chain risk management when sourcing in China is demonstrated based on the needs of the industry partners and its important role in the reference process for global sourcing and total cost of ownership analyses. Current supply chain risk management methods are improved by adding elements of systems thinking. The supply chain risk structure and supply chain
risk dynamics models help to model and understand complex risk situations. Their
applicability to real-life supply chain risks and the advantages that they bring with them are demonstrated. The potential supply chain risks that companies face in China are summarized in four interrelated risk scenarios. These are:
“total cost too high”, “insufficient delivery reliability”, “insufficient quality” and “damage to reputation”. The measures developed with the industry partners to mitigate selected supply chain risks are presented in the thesis. These are the “management of bargaining power in buyer-supplier relationships”, “IT integration in supply market research and supplier evaluation”, “collaboration support in
global design-manufacturing relationships”, “human resource management in China”,
“introduction of global VMI and CPFR systems”, “proactive climate protection schemes” and the introduction of a “supplier code of conduct”.

The PhD thesis “Managing Supply Chain Risks – The Example of Successful Sourcing from China”, emerged as a result of the project.