Delayering the global production network into congruent subnetworks

Abstract

The literature in operations management has not kept up with the growing complexity of and opportunities offered by global production networks. Managers need new tools to cope with this complexity. We propose one that is based on a model that delayers the global plant network into a set of subnetworks on the basis of complexity and proprietary information in the products they produce and production processes they use to produce them. This allows examining whether each subnetwork is congruent—i.e., has an appropriate manufacturing mission and the competencies that it would need to carry it out. We apply this tool to analyze the global production networks of five companies and illustrate its usefulness in performing periodic audit of the global production network and identifying potential strategic anomalies that deserve attention.