Job Talk: Global Sourcing: Impact of Sourcing Strategies on Operational Performance

Abstract: Over the last few decades there has been secular increase in global sourcing. The operational impacts of global sourcing practices are at the center of considerable debate. Often, operations management theory provides competing advantages of different global sourcing practices. The net impact of these practices depends on the relative magnitudes of the competing advantages and, therefore, can be best answered empirically. The key impediment to empirically resolving the competing arguments around global sourcing practices has been the lack of available firm-level data. My research overcomes this impediment by constructing a novel firm-level data set on imports by public US firms using information from bill of lading manifests (customs forms). We process over 45 million bill of lading manifests to construct global supply chain characteristics of U.S. public retail, wholesale and manufacturing firms. My talk will illustrate usage of this data to empirically study link between global sourcing strategies and two operational metrics: inventory investment and supply chain resilience. We find that an increase in global sourcing results in an increase in inventory investment, and that employing sourcing from a wider supplier base can mitigate this increase in inventory investment. With regards to supply chain resilience, we find that contrary to the popular notion that one must widen the supplier base to effectively manage disruption risks, firms may be better off by building strong relationships with fewer suppliers.