Transaction costs in global supply chains of manufacturing companies

Philipp Bremen, Josef Oehmen, Robert Alard, Paul Schönsleben

Research output: Chapter in Book/Report/Conference proceedingArticle in proceedingsResearchpeer-review

Abstract

Outsourcing has advanced to an important measure that is applied broadly in operations management. Nowadays, suppliers of manufacturing companies do not only provide direct material like raw material and operational supplements but offer components and advanced modules incurring many value-adding stages. Whereas in the past companies built up local supplier networks, they recently tend to search for global or offshore sources. However, not all companies reach their expectations towards the success of global sourcing projects. Important reasons for relocating manufacturing capacities back to local suppliers or in-house manufacturing are costs for unexpected coordination activities, limited flexibility and declined or fluctuating quality. The theory of Transaction Cost Economics postulates that transaction costs of the types information, communication and coordination determine the governance structure of a supply chain, i.e. market, hybrid or firm. The objective of this paper is to analyze the cause-and-effect chain of inter-firm transaction costs concerning global sourcing. The resulting qualitative model based on explorative multiple-case study research will be validated in a survey among Swiss manufacturing companies.
Original languageEnglish
Title of host publicationProceedings of the 5th International Symposium on Management, Engineering and Informatics (MEI 2009)
Publication date2009
Pages175-180
Publication statusPublished - 2009
Externally publishedYes
Event5th International Symposium on Management, Engineering and Informatics - Orlando, FL, United States
Duration: 10 Jul 200913 Jul 2009
Conference number: 5

Conference

Conference5th International Symposium on Management, Engineering and Informatics
Number5
CountryUnited States
CityOrlando, FL
Period10/07/200913/07/2009

Keywords

  • Costs
  • Cybernetics
  • Information science
  • Information systems
  • Management information systems
  • Manufacture
  • Outsourcing
  • Supply chains
  • Systems analysis
  • Industry

Cite this

Bremen, P., Oehmen, J., Alard, R., & Schönsleben, P. (2009). Transaction costs in global supply chains of manufacturing companies. In Proceedings of the 5th International Symposium on Management, Engineering and Informatics (MEI 2009) (pp. 175-180)