Global Business Initiative Convenes Supply Chain Experts

More than two dozen industry experts and scholars from around the world gathered at Georgetown University’s McDonough School of Business on Dec. 2 to discuss a global supply chain benchmarking project.

The one-year research effort focuses on current practices and strategies associated with the sourcing of production in a global supply chain. The faculty researchers surveyed 74 senior managers at leading global manufacturing companies to gain insight into three questions:

• What global sourcing decisions have been made and what decisions are being contemplated?
• What are the drivers of these decisions?
• What has been their observed or expected impact? 

Throughout the day-long conference, participants learned about and discussed key takeaways from the survey, including:

• Many companies are now restructuring their supply chains by shifting production volume and investing in automation or research and development.
• Firms engage in a wide variety of strategies.
• China continues to be a magnet for the companies in the sample; Companies are motivated by proximity to markets and supply chain-related factors, not low labor costs alone.
• There is evidence for a return of manufacturing in North America, but not at a significant scale and not as reshoring. The source of investment primarily is coming from Asian and European firms.
• The majority of the firms that increased production in North America are non-U.S. firms.

Faculty from Georgetown McDonough, the University of Pennsylvania’s Wharton School of Business, the Stanford University Graduate School of Business, the Olin Business School at Washington University (St. Louis), Santa Clara University, WHU – Otto Beisheim School of Management in Germany, and the Graduate School of Business Administration at Kobe University in Japan joined industry participants from 13 companies, including Hewlett-Packard and QIAGEN, to discuss the research.

Ricardo Ernst, professor of operations and director of the school’s Global Business Initiative, led the discussion.

This is the second conference based on the benchmarking survey. Last year, the group convened at Wharton’s San Francisco campus to discuss the first phase of data collection. In the future, the faculty plan to create a formal version of the report’s findings, replicate the survey with a larger sample, and develop case studies of companies.