Management Insights

摘要

Warren H. Hausman, Hau L. Lee, Uma Subramanian There are many important factors that companies use in making global sourcing decisions in supply chains. One of these factors is logistics, measured in time and cost of moving goods from one country to another. An element often overlooked is the "logistics friction" that includes the time and cost involved in crossing borders. Making use of an extensive data base provided by the World Bank, Warren Hausman, Hau Lee, and Uma Subramanian conducted an econometric study to estimate the role of logistics friction as a determinant of bilateral trade. Their study showed that, indeed, friction in the form of average processing time, cost and the variability of processing time can significantly affect bilateral trade. Hence, in making global sourcing decisions, companies should take into account the cross-border logistics friction, in addition to the usual components of the total landed costs. The authors' model also provides quantitative measures of the impact on trade by improving the elements of logistics friction. The latter can be useful for policy makers as well as private enterprises to collaborate in investing in such improvements.