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Demand & Supply Chain Management Evolution

27 Nov 2014
RESEARCH: Reshaping The Interface Between Marketing And Operations In Globalizing Furniture Supply Chains

Buciuni G., Russo I, Mola L.
Università di Verona - LogiMaster

Over the past few decades, international fragmentation of production and offshore outsourcing have remarkably altered the organization of Western supply chains. Particularly in low-tech, manufacturing sectors, the fast spread of global production network has forced managers to reconsider the configuration of their supply chains, including the alignment between marketing and operations. Although the marketing-operations interface (MOI) is crucial in supply chain management, the understanding of globalization’s effects on this process remains uncertain and unclear. By focusing on the furniture industry in USA and Italy, this paper uses a multiple case study to address the evolution of MOI in globalizing supply chains. Findings suggest that the relationship between marketing and operations in supply chains is contingent on dynamics of internationalization. Acknowledging the exploratory nature of this study, this article also indicates room further improvement and research development.

By: Buciuni G., Russo I, Mola L.

Quickened paces of global competition are forcing established companies to review their business model in a systemic fashion. Increased international fragmentation of production (Myers, Borghesi & Russo, 2007) and the rise of global supply chains (Gereffi & Lee, 2012) have fueled the ‘break up’ of vertically integrated structures in favor of geographically dispersed production networks. Although relocation of operations to low-wage nations enables organizations to reduce overhead, focus on high-value functions and expand their boundaries globally, the coordination of globalized supply chains also entails various complexities for firms (Mudambi & Venzin, 2010). To successfully compete in today’s global scenario, managers are in fact required to face strategic decisions regarding the optimal level of disaggregation of the firm’s supply chain and the geographical and organizational allocation of discrete steps of value creation (Contractors, Kumar, Kundu & Pedersen, 2010). As a result, firms are called to reconsider the interface between distinct supply chain functions and achieve a right level of integration. In particular, the globalization of supply chains has raised the need for a finer analysis of the interface between marketing and operations. Although the importance of the alignment between these functions has been widely addressed by the existing literature (i.e. Ho & Tang, 2004; Fugate, Stank, Mentzer, 2009), the study of globalization’s effects on marketing-operations interface (MOI) has received little attention thus far. Acknowledging this research gap, we aim to address the following research question:

How are supply chain global strategies affecting the marketing-operations interface in furniture manufacturing companies?
Departing from this inquiry, we propose and discuss a multiple case study.
Our unit of analysis is the single firm; precisely we focus on manufacturing firms competing in furniture supply chain. The scope of this study is to understand how furniture manufacturers in USA and Italy are re-organizing their supply chains globally and investigate the way current supply chain strategies are affecting the interface between marketing and operations. Although the importance of managing the interface between marketing and operations is widely acknowledged in extant literature (e.g. Holweg & Pil, 2008), the coordination of the two functions remains problematic due to their differing roles, orientations and reward systems within the organization Our work builds on ten in-depth case studies of established manufacturing companies, whose respective supply chain has been lately confronted by dynamics of international competition. In the development of the multiple case study, we devoted specific attention to the role played by furniture manufacturers in reconfiguring the organization of their supply chains and reshaping the interface between marketing and operations. The case study firms were selected on the basis of a purposeful sampling (Patton, 1990, Eisenhardt 1989, Yin 1994), whose goal is to select cases that can shed light on the research question. Selected firms had to meet a set of a priori criteria, which were defined in the case study protocol. Specifically, selected firms had to: 1) operate in the same industry, notably the furniture industry 2) be firms which were originally set up as furniture manufacturers and can currently be classified as producers of final goods, whose brand is recognized in the final market;
and 3) be involved in a value chain, the organization of which has recently been affected by the dynamics of international competition (e.g. offshore outsourcing; exploration of new foreign markets). This led to the identification of 15 to 20 firms in each context, half of which agreed to participate as case study firms in this research. However, we terminated our investigation at ten, for reasons of theoretical saturation.



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