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Raw Materials Procurement Strategy: The Differential Advantage in the Success of Japanese Steel
Author(s) -
Mohan Krishna,
Berkowitz Marvin
Publication year - 1988
Publication title -
journal of purchasing and materials management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.75
H-Index - 92
eISSN - 1745-493X
pISSN - 0094-8594
DOI - 10.1111/j.1745-493x.1988.tb00200.x
Subject(s) - procurement , business , raw material , commerce , resource (disambiguation) , world war ii , industrial organization , finished good , economics , law , marketing , production (economics) , computer science , political science , computer network , chemistry , organic chemistry , macroeconomics
One of the best kept secrets of the Japanese economic miracle after World War II, and particularly its rise to becoming the world's leader in steel sales, has been the intracacies of its aggressive international procurement and logistics strategy. That any nation essentially devoid of raw materials could organize the logistics of acquiring bulky, heavy inputs from locations 5,000–15,000 miles from its domestic factories, and then be able to sell finished products to distant resource‐rich industrialized nations at prices significantly below those of local manufacture, stretches the imagination. This accomplishment also refutes the traditional economic laws of comparative advantage. This article makes clear the elements of the long‐term Japanese materials management strategy that were an essential precondition for efficiently manufacturing steel and have been the vehicle for repeated successes in many other industries.