Coping with customs clearance uncertainties in global sourcing

Abstract

Purpose Seeks to show how developing countries are becoming important links in global sourcing networks. However, inefficient functioning of governments as customs‐clearance agents adversely impacts the flow of goods to and from these countries. This uncertainty not only impacts firms in the developing countries, but also seeps into the global supply networks in which these firms participate. Existing strategic supplier partnership (SSP) models do not address the role of government. Design/methodology/approach This paper utilizes observations gathered from a field study to understand better the mechanisms that companies use to cope with government‐induced import uncertainty. The paper draws insights from a buyer‐buyer collaboration mechanism found among a few firms in the printed circuit board manufacturing industry in India. To generalize the findings to other settings, the paper investigates how such a mechanism came to be, and how others in different settings might benefit from similar mechanisms. Findings The paper advances nine theoretically grounded propositions regarding other situations in which such buyer‐buyer collaboration may be suitable in other industries or countries. Research limitations/implications The propositions advanced here need to be subjected to empirical examination, to test and extend the theory's boundaries to other industries and countries. Several “original” concepts generated here need to be developed into researchable constructs, and valid, reliable instruments need to be generated. Originality/value The propositions advanced here regarding buyer‐buyer cooperation among competing firms represent a clear extension of the traditional buyer‐supplier cooperation extensively studied in SSP models. Moreover, the results are highly usable and add value to supply chain practices.