Culture matters for supply chain investment

By Kevin Manne

BUFFALO, N.Y.—For international manufacturers looking to invest in an efficient supply chain, the culture of the country where you choose to invest can impact the bottom line, according to a new study from the University at Buffalo School of Management.

The researchers found that supply chain integration—or when a company focuses on performance increases with its suppliers and customers—has a positive effect across national cultures, particularly those that tend to be formalized, analytical and focused on the future, in a study recently made available online ahead of publication in Cogent Business and Management.

“Manufacturing supply chains, such as the ones for our smartphones, cars and clothing, are increasingly international, spanning many cultures,” says Jurriaan de Jong, PhD, assistant professor of operations management and strategy in the UB School of Management. “It’s been shown in many studies that supply chain integration positively affects performance, but we discovered that the relationship gets stronger or weaker based on which culture you live in.”

For the study, the researchers analyzed surveys of more than 1,000 manufacturing plants from 14 countries around the world to determine the delivery performance of each, and used two frameworks to determine that two cultural factors had an effect on supply chain efficiency: uncertainty avoidance and future orientation.

“Managers should first focus on countries with high uncertainty avoidance—those with formal, analytical cultures such as Nigeria, Taiwan and China—to improve return on investment,” says Nallan Suresh, PhD, UB Distinguished Professor of operations management and strategy in the UB School of Management. “The second step should be to invest in countries with low future orientation, or those that have traditionally focused less on strategic planning and developing and investing in the future.”

De Jong and Suresh collaborated on the study with lead author and UB School of Management PhD graduate Torsten Doering, associate professor/director of the International Business program at Daemen College.