Is local sourcing out of fashion in the globalization era? Evidence from Italian mechanical industry

The paper concerns a study on the changes affecting leading cluster companies' supplier relationships. In particular, the paper aims at investigating under which conditions and how industrial cluster companies rely on local suppliers in the current context of international competitive pressure and easier access to international supply sources. The research methodology is qualitative and based on a long-term longitudinal research of three case studies of Italian industrial cluster companies that are leading firms in specific niches of the mechanical industry. Two main questions are debated: under which conditions have industrial cluster companies relied on local suppliers? What has been the evolution of relationships between industrial cluster companies and their local suppliers? The empirical analysis shows that local suppliers have been playing strategic roles in different ways in distinct historical phases, contributing actively in terms of knowledge and competence development, production flexibility, delivery performance and cost efficiency.     

Choosing between single and multiple sourcing based on supplier default risk: A real options approach

The selection of a given purchasing strategy is a central activity in risky environments. Single sourcing, a powerful approach in a stable environment, can amplify a firm's exposure to risk (e.g., supplier's default) in the presence of uncertainty. Multiple sourcing, however, presents higher costs due to the management of more than one supplier. A correct evaluation from a risk management perspective is needed. This paper proposes the Real Options approach for valuing the probabilistic benefits of multiple sourcing in managing the supplier default risk (to be compared with the related higher costs). A computational model, based on the Monte Carlo simulation, was developed. The results show the (probabilistic) advantages of adopting the multiple sourcing strategy in risky environments for a specific case. The proposed sensitivity analysis is aimed at identifying the impact of the most important transactional parameters on the differential benefits of the two sourcing strategies. Thus, the model and its managerial implications represent a valid support for the decision-making process in the presence of uncertainty.     

Reproducing vulnerabilities in agri‐food systems: Tracing the links between governance,financialization, and vulnerability in Europe post 2007–2008

Interconnected sets of vulnerabilities have emerged in the European food system since 2007–2008, raising concerns about food security in a region with arguably some of the most advanced and prosperous economies and environmental governance frameworks. Historically, this is suggesting the current “double jeopardy” problem in food system vulnerability—with systemic declines both in sustainability (the ability of the food system to ecologically renew itself) and food security (the ability of a population to access sufficient nutritional foods and feed itself). By focusing on both drivers and impacts of food system vulnerabilities in the European Union and United Kingdom, this paper explores a grounded and relational approach to financialization—recognized as a key expression of recent growing vulnerabilities. Through the prism of the current socio‐economic pressures facing food producers, and the emergence of potentially “stranded assets” in the agri‐food system more generally, the analysis seeks to show how the combined relationships between neo‐liberalized governance and the market volatilities encouraged by new rounds of financialization are creating “nested” vulnerabilities. As we conclude, a critical, grounded, and systemic understanding of food system vulnerabilities thus becomes a key feature and precursor for potentially developing more resilient agri‐food systems—both regionally and globally.     

Investing for the old age: pensions, children and savings

In the last century, most countries have experienced both an increase in pension spending and a decline in fertility. We argue that the interplay of pension generosity and development of capital markets is crucial to understand fertility decisions. Since children have traditionally represented for parents a form of retirement saving, particularly in economies with limited or nonexistent capital markets, an exogenous increase of pension spending provides a saving technology alternative to children, thus relaxing financial (saving) constraints and reducing fertility. We build a simple two-period OLG model to show that an increase in pensions is associated with a larger decrease in fertility in countries in which individuals have less access to financial markets. Cross-country regression analysis supports our result: an interaction between various measures of pension generosity and a proxy for the development of financial markets consistently enters the regressions positively and significantly, suggesting that in economies with limited financial markets, children represent a (if not the only) way for parents to save for old age, and that increases in pensions amount effectively to relaxing these constraints.     

PERSPECTIVE: Establishing an NPD Best Practices Framework

Achieving NPD best practices is a top‐of‐mind issue for many new product development (NPD) managers and is often an overarching implicit, if not explicit, goal. The question is what does one mean when talking about NPD best practices? And how does a manager move toward achieving these? This article proposes a best practices framework as a starting point for much‐needed discussion on this topic. Originally presented during the 2004 Product Development Management Association (PDMA) Research Conference in Chicago, the article and the authors' presentation spurred a significant, expansive discussion that included all conference attendees. Given the interest generated, the decision was made to move forward on a series of rejoinders on the topic of NPD best practice, using the Kahn, Barczak, and Moss framework as a focal launching point for these rejoinders. A total of five rejoinders were received and accompany the best practices framework in this issue of JPIM. Each rejoinder brings out a distinct issue because each of the five authors has a unique perspective. The first rejoinder is written by Dr. Marjorie Adams‐Bigelow, director of the PDMA's Comparative Performance Assessment Study (CPAS), PDMA Foundation. Based on her findings during the CPAS study, Adams comments on the proposed framework, suggesting limitations in scope. She particularly points out discrepancies between the proposed framework and the framework offered by PDMA's emerging body of knowledge. Dr. Elko Kleinschmidt, professor of marketing and international business at McMaster University, wrote the second rejoinder. Based on his extensive research with Robert G. Cooper on NPD practices, he points out that best practices really raise more questions than answers. Thomas Kuczmarski, president of Kuczmarski and Associates, is the author of the third rejoinder. Kuczmarski highlights that company mindset and metrics are critical elements needing keen attention. Where do these fit—or should they—in the proposed framework? The fourth rejoinder is written by Richard Notargiacomo, consultant for the integrated product delivery process at Eastman Kodak Company. Notargiacomo compares the proposed framework to a best practices framework Kodak has used for new product commercialization and management since 1998. The distinction of the Kodak framework is the inclusion of a product maturity model component. Dr. Lois Peters, associate professor at Rensselaer Polytechnic Institute (RPI), is the author of the fifth rejoinder. She brings out issues of radical innovation, a natural focal issue of RPI's radical innovation project (RRIP). It is highlighted that radical innovation may require unique, distinctive process characteristics a single framework cannot illustrate. Multiple layers of frameworks may be more appropriate, each corresponding to a level of innovation desired. The overall hope is that the discourse on best practices in this issue of JPIM generates more discussion and debate. Ultimately, the hope is that such discourse will lead to subsequent continued study to help discern what NPD best practice means for our discipline.     

The MultiJurisdictional Disclosure System: Model for Future Cooperation?

This study investigates whether the MultiJurisdictional Disclosure System (MJDS) was successful in meeting its stated objectives, namely, facilitating cross-border offerings and reporting by Canadian firms. The MJDS is a bilateral agreement implemented in July 1991 between Canadian and US market regulators. It is hypothesized that facilitating crossborder offerings via the MJDS will lead to an increase in the number of US listings by Canadian firms and reduced costs of US listing for extant Canadian listers. Data evaluated include changes in US exchange listings from 1987 to 1995 and questionnaires to two subgroups of Canadian firms: (1) the population of Canadian firms listing their securities in US and Canadian markets and (2) a sample of Canadian firms listing only on Canadian exchanges. We conclude that for most Canadian firms, the MJDS provides no significant benefit. Further, few firms reported that the MJDS affected their decision to list in the United States. Our results suggest that the MJDS has not, overall, provided the benefits originally envisioned under it, and we question whether it is an appropriate model for future cooperation between national regulatory groups.