Designing Supply Chains for Overseas Markets: The Case of Korean Steel Maker POSCO in Japan

A company’s competitive edge is defined by its set of capabilities and one of the most crucial capabilities is that of superior design of the supply chain. The supply chain can be thought of as a network of capabilities, rather than merely a chain of collaborating organizations. Designing a successful and reliable supply chain is a challenge, especially in an international context. The present research analyzes the critical strategic factors in designing such supply chains with a focus on supply chains for overseas markets.

In this presentation, we conduct an in-depth case study of Korean steel maker POSCO (Pohang Iron and Steel Corporation) which has several production and processing facilities in Japan, mainly for Japanese automakers including Toyota, Honda and Nissan. We find that POSCO’s supply chains are designed based on the value propositions of speed and responsiveness, both critical factors in the Japanese market where customers require JIT (just-in-time) services. The results of our case analysis further suggests matching markets, strategies and supply chain designs to be the key strategic factor in designing successful and reliable supply chains.

Sungwoo Byun is a doctoral student in the Graduate School of Economics at The University of Tokyo.