Synergy from configuration of global production networks: drivers, mechanisms, and outcomes

Abstract

This paper explores the network synergies available from the configuration of highly dispersed, global production networks (GPNs). Synergy theory from the literature on intra-firm and inter-firm GPNs is examined in terms of drivers, mechanisms and outcomes. An explanatory model is developed and enriched via a series of extended case studies of firms undertaking re-configuration of their GPNs during the period 2003–2014. The primary finding is that firms create synergy in their GPNs by selecting specific configuration mechanisms, in response to a certain set of external drivers, in order to achieve certain synergistic outcomes. The paper classifies the main types of drivers, mechanisms and outcomes in terms of key variables and discusses their inter-connections and relationships.

Keywords:

• Global production networks
• configuration
• synergy

Acknowledgements

The authors would like to express their gratitude to Dr Don Fleet, Peter Templeton and Phil Hanson for their involvement and support, and to the anonymous industrial collaborators who made this research possible.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

P. A. Christodoulou

Dr Paul Christodoulou is Principal Industrial Fellow at the Cambridge University Institute for Manufacturing (IfM) and has recently completed a part-time PhD at Cambridge reviewing the programme of action research covered by this paper (on which he was primary researcher during the period 2003–2014). Before joining IfM, he spent 19 years in senior management roles in multinational manufacturing companies based in the UK, USA and France. Starting as a graduate engineer, he had leadership roles in production, design and sales before heading up corporate strategy projects covering global manufacturing, marketing, M&A and post-M&A integration. He has a first class engineering degree from Durham University, an MBA (with distinction) from INSEAD.

J. S. Srai

Dr Jagjit Singh Srai is Head of IfM’s Centre for International Manufacturing, where he completed his PhD. His research involves working closely with industry in the analysis, design and operation of international supply networks. Previous roles have been in industry working as a supply chain director of a multinational regional business, technical director of a national business and other senior management and front-line operations. He also has significant consultancy experience involving the application of the latest research with leading multinationals and government organizations. He holds a first-class honours degree in Chemical Process Engineering from Aston University and is a Fellow of the Institute of Chemical Engineers.

M. J. Gregory

Professor Sir Mike Gregory recently retired as Head of the IfM and oversaw the programme of research covered by this paper. Following an early career in industry, he was the founder member of the team which established the IfM in 1998. Linking science, engineering, management and policy and integrating education, research and practice, the IfM now has over 230 staff and research students and a further 100 undergraduate and Masters’ students. His work is closely linked with industry and government and he has published in the areas of manufacturing strategy, technology management, international manufacturing and manufacturing policy. He served as Executive Director of the Cambridge MIT Institute from 2005 to 2008 and was Springer Visiting Professor at UC Berkeley in 2008/9.