Global Supply Chain Integration: Addressing The Trade-Off Between Procurement Cost And Lead Time

This paper aims at studying to what extent companies performing global sourcing adopt integration mechanism with suppliers, both in terms of information sharing and system coupling. Furthermore we analyze in our model the effect of purchasing strategies (i.e. procurement cost reduction and procurement lead time reduction) as relevant explanatory variables for supply chain integration. These research goals are addressed by means of the fourth edition of the International Manufacturing Strategy Survey (IMSS). A Structural Equation Model is developed to test the described relationships. Results show that global sourcing is performed primarily by those companies aiming at reducing procurement cost, while the goal of reducing lead of time is not related to global sourcing, neither negatively. Global sourcing is instead positively related to information sharing adoption but has no direct impact on system coupling. These results partially confirm existing literature but provide also new insights about supply chain integration in a global sourcing context.