Product Variety, Sourcing Complexity, and the Bottleneck of Coordination
dc.contributor.author | Zhou, Yue Maggie | |
dc.contributor | Wan, Xiang | |
dc.date.accessioned | 2016-09-14T13:15:24Z | |
dc.date.available | 2016-09-14T13:15:24Z | |
dc.date.issued | 2016-10 | |
dc.identifier | 1329 | en_US |
dc.identifier.uri | https://hdl.handle.net/2027.42/133522 | |
dc.description.abstract | This paper studies the coordination burden for firms that pursue variety as their main product strategy. We propose that product variety magnifies the tension between scale economies in production and scope economies in distribution, giving rise to complex sourcing relationships. Sourcing complexity worsens performance and poses a dilemma for organization design: A hierarchical structure with intermediate coordinating units such as sourcing hubs reduces sourcing complexity for downstream distribution but creates bottlenecks at the hubs, hurting performance for both the hubs and downstream distribution. We empirically examine operations data for about 300 distribution centers within a major soft drink bottling company in 2010-2011. Results support our hypotheses, illuminating the source of complexity in multi-product firms and the challenge for organization design in managing complexity. | en_US |
dc.subject | product variety | en_US |
dc.subject | complexity | en_US |
dc.subject | coordination | en_US |
dc.subject | bottleneck | en_US |
dc.subject | organizational structure | en_US |
dc.subject | stockouts | en_US |
dc.subject.classification | Strategy | en_US |
dc.title | Product Variety, Sourcing Complexity, and the Bottleneck of Coordination | en_US |
dc.type | Working Paper | en_US |
dc.subject.hlbsecondlevel | Business (General) | en_US |
dc.subject.hlbtoplevel | Business | |
dc.contributor.affiliationum | Ross School of Business | en_US |
dc.contributor.affiliationother | Ohio State University (OSU) - Fisher College of Business | en_US |
dc.contributor.affiliationumcampus | Ann Arbor | |
dc.description.bitstreamurl | http://deepblue.lib.umich.edu/bitstream/2027.42/133522/1/1329_Zhou.pdf | |
dc.description.bitstreamurl | http://deepblue.lib.umich.edu/bitstream/2027.42/133522/4/1329_Zhou_Oct2016.pdf | |
dc.description.filedescription | Description of 1329_Zhou_Oct2016.pdf : October 2016 revision | |
dc.owningcollname | Business, Stephen M. Ross School of - Working Papers Series |
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