High-tech Supply Procurement Decisions of Smart Manufacturing Enterprises in China Considering the Risk of Overseas Supply Disruptions

doi:10.3969/j.issn.1007-7375.230229

Abstract

Abstract: Currently, changes in international economic and technological connections increase the risk of high-tech supply disruptions in the global supply chain system. For Chinese smart manufacturing enterprises that are undergoing digital and intelligent transformation, balancing the procurement of high-tech supplies from international and domestic suppliers to deal with uncertainties and enhance supply chain resilience has become an important issue. This paper proposes a game model consisting of an overseas supplier and a domestic supplier with technological quality differences and a domestic smart manufacturer, to study whether potential government intervention measures can improve the willingness of Chinese smart manufacturing enterprises to procure from domestic suppliers in the presence of overseas supply disruption risks. Results show that the loss compensation provided by the government lowers the threshold for technological requirements of manufacturers on domestic suppliers. The higher the proportion of government loss compensation, the higher the manufacturer acceptance of domestic supplies. Further study reveals that when the potential quality risk probability of domestic suppliers' products due to lower technological levels is closer to the risk probability of overseas supply disruptions, the loss compensation from the government to smart manufacturing enterprises can more effectively increase the willingness to procure domestically, leading to greater selection of domestic suppliers by smart manufacturing enterprises.

Key words: overseas supply disruptions, smart manufacturing enterprises, high-tech supplies, procurement decision

CLC Number:

F406
F274

HE Jianhong, LI Xiangying, LI Lin, CAI Dan. High-tech Supply Procurement Decisions of Smart Manufacturing Enterprises in China Considering the Risk of Overseas Supply Disruptions[J]. Industrial Engineering Journal, 2024, 27(5): 114-125.

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