Tipping the balance of power: the case of Large Scale Systems Integrators and their supply chains Online publication date: Sun, 10-Jun-2007
by Irene J. Petrick
International Journal of Foresight and Innovation Policy (IJFIP), Vol. 3, No. 3, 2007
Abstract: The Large Scale Systems Integrator (LSSI) model of supply chain organisation and management is gaining in popularity as Original Equipment Manufacturers (OEMs) seek gains from distributed innovation and leveraged supplier R&D, all the while maintaining economies of scale at the assembly stage. The LSSI model requires a change in the roles and responsibilities of both OEM and its suppliers. Ultimately, staffing patterns at all levels of the supply chain will need to adapt to changing roles for engineering, design, purchasing, and manufacturing. The success of the LSSI model is based on comprehensive and shared knowledge management responsibilities, coupled with deep technical, customer, and market knowledge that are distributed across the extended enterprise. This disrupts the balance of power in the traditional OEM-led supply chain model, offering opportunities for Tiers 2 and 3 suppliers to gain influence.
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