A Taxonomy of
Supply Networks
Supply Networks
What are the two main factors used to classify supply networks in Harland’s taxonomy?
The degree of supply network dynamics and the degree of focal company supply network influence
What is the difference between international purchasing and global sourcing?
International purchasing involves buying from foreign suppliers, while global sourcing integrates and coordinates materials, suppliers, and sourcing strategies across multiple worldwide locations.
What major vulnerability is Apple’s supply chain facing?
Apple’s supply chain is exposed to physical-climate risks (floods, heatwaves, storms) because many manufacturing sites are located in regions that will be most severely impacted by climate change.
What are the two measures for the supply network dynamic dimension?
1. Operations process dynamics were measured in terms of process variety and volume
2. Market dynamics were measured in terms of frequency of new product launches, number of competitors supplying similar products, and ease of switching
List at least three of the seven characteristics of global sourcing excellence and explain
Executive commitment to global sourcing
Rigorous and well-defined processes
Availability of needed resources
Integration through information technology
Supportive organizational design
Structured approaches to communication
Methodologies for measuring savings
What role did the "IKEA Components" division play?
It acted as a "bridging" entity that facilitated relationships and information sharing between IKEA's 1st-tier suppliers(Sapa) and the 2nd/3rd-tier suppliers(Chinese suppliers).
Why do routinized networks typically emphasize process innovation over product innovation?
Because they operate in stable environments with mature products, where competitive advantage comes from operational efficiency and cost minimization
What key elements are required for successfully implementing Level IV sourcing across worldwide sites?
-Worldwide information systems
-Personnel with advanced knowledge and skill sets
-Extensive coordination and communication mechanisms
-An organizational structure that supports global integration
-An executive leadership that can clearly articulate a global vision.
Which supply network type do you consider Apple is classified? Why?
Supply Network Type 2: Dynamic/High Degree of Focal Firm Influence
Apple competes primarily on innovation and has a high influence on managing the network and making decisions that have implications for other actors.
Which supply network type poses the most difficult managerial challenge? Why?
Supply Network Type 1: Dynamic/Low Degree of Focal Firm Influence
because it is simultaneously facing high complexity and uncertainty while lacking the power to control or direct the network
What are the two primary distinctions that separate companies operating at Level IV and Level V?
1. Scope of integration: Level IV companies integrate and coordinate sourcing strategies among worldwide buying locations. While Level V companies integrate not only among worldwide buying locations but also across functional groups, such as operations, marketing, and engineering
2. Focus: Level IV companies are mainly focused on developing global agreements or contracts. Level V companies go further by also working to "standardize their supply management processes and practices worldwide"
Explain the "domino effect"
The "domino effect" means that IKEA's decision to source globally was not an isolated event but "cascaded" through its supply network. This meant that IKEA, as the powerful customer, heavily influenced the sourcing decisions of its suppliers