Young Won Park 

(Manufacturing Management Research Center, Graduate School of Economics, University of Tokyo, Japan)

 

 

Abstract: This paper aims to examine integration of supply chain and demand chain in emerging markets. We present a research model of demand and supply chain integration which responds to customer’s needs through the integrated information flows. Integration of demand and supply chain synchronizes the key processes in terms of frontend development, product planning, product design, procurement, manufacturing, sales and marketing, maintenance activities based on customer needs as process routines. This paper discusses innovative supply chain practices of electronic firms and auto-manufacturers that operate in China. Successful firms implement a comprehensive level of localization that includes both staying vigilant on the changing market climate and being savvy in governmental relations and are able to adapt well to the competitive challenges, through integration of demand and supply chain. The Apple Company regards refreshingly attractive design as its core competence and thus outsources its production functions, achieving notable cost advantage. In contrast, the core competence of Japanese firms is in their manufacturing capabilities. Even in the areas of upstream R & D and product development, this paper finds the examples of Korean firms (e.g., Hyundai Motor) that achieve both quality and speed. The strength of Korean firms is in their global supply chain management, which is based on effective target market research, manufacturing capabilities and information integration across front- and back-end value chains. These firms develop their supply chain capabilities through integrating affiliated Korean suppliers, local Chinese suppliers, and outsourcing arrangements using effective operational and social control mechanisms. In brief, integration of both supply and demand chain is crucial for emerging markets. In the coming years, as more global firms turn their attention to the western regions of China, it is all the more interesting to see how successfully global firms in China implement their supply and demand chain strategies.

 

 

Key words: supply chain; demand chain; integrated information flows; emerging market; Japanese firms

 

JEL codes: M160