The GEXSO-Study (Global Excellence in Supply Chain Operations)

Globalization skills as the key to corporate success. The internationalization and successful process optimization of supply chains in the sectors machinery and plant engineering, industrial component manufacturing and the automotive supplier industry.

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The GEXSO Study


European machinery and plant engineers, industrial component manufacturers and automotive suppliers have experienced an extraordinary globalization process that was characterized by high speed and intensity. We expect an acceleration of this process within the next ten years.

During the past phase of globalization some production, companies were more successful than others. The study Global Excellence in Supply Chain Operations (GEXSO) identifies globalization skills that are necessary to control today’s complex supply chains within the abovementioned industries.

The global economy is shaped by a high degree of complexity. Companies that operate on a global scale face various challenges and manage complex supply chains to implement their acquisition, production and distribution processes. In particular, companies strive to meet the expectations within global networks, to facilitate a management concept of global supply chains and to achieve competitive advantages through long-term supply chain planning and a supply chain process optimization. The following questions arise: To what extent do the structures and processes of a supply chain determine the success and worth of a company, and which role do suppliers, partners and customers play? In this context, we are proud to present to you the GEXSO Study (Global Excellence in Supply Chain Operations). For the first time, this study examines which factors and processes really determine the success and value of a company and should therefore be included in successful supply chain process optimization and planning.

Supply chain processes and factors that were examined in the study:

– Customer and market orientation
– Information and communication
– Supplier management
– Supplier evaluation
– Human resource planning
– Supply management
– Flexibility
– Risk management
– Supply chain planning

The study focuses on companies in the sectors machinery and plant engineering, industrial component manufacturing and the automotive supplier industry, and offers participating production companies a possibility to compare themselves cost-free and strictly confidentially within their respective sectors. The participants will answer an online survey that takes approximately 30 minutes. Companies that prefer an interview to the online survey can also arrange phone or personal interviews with a member of the GEXSO team. Once we have successfully conducted the study, every participating company will receive an individual report that illustrates their position in comparison to other participants of their sector in an anonymized way. Consequently, all participants have the opportunity to gain valuable insights into successful supply chain planning and supply chain process optimization.
GEXSO is a cooperation of Darmstadt University of Technology, the magazine LOGISTIK HEUTE and the management and technology consulting agency BearingPoint.

The GEXSO study model

The GEXSO team developed a model specifically for this study. This model examines the impact of supply chain factors and processes on the success of a company, and identifies factors for successful supply chain planning and supply chain process optimization.

The model is composed by three components: endogenous variables (performance data), exogenous variables (impact factors) and moderating variables.

Modell untersucht Beziehung von Einflussfaktoren zum Unternehmenserfolg unter Berücksichtigung von moderierenden Variablen
GEXSO identified seven impact factors that directly affect the success of a company and the global excellence of a supply chain: (1) customer and market orientation, (2) supplier management, (3) human resource planning, (4) strategy and governance, (5) information and communication, (6) flexibility, and (7) risk management. Each impact factor is based on a set of questions that is sector-comprehensive and focuses on ‘best practices’. We examine their relevance by analyzing their correlations to their corporate success.

In addition, we integrate moderating variables (sector, globalization degree, complexity) that directly affect the impact factors and thus indirectly have an impact on the corporate success. The study aims to determine the impact of particular structures and processes in a global supply chain on the success of a company. We will conduct the study regularly to be able to determine ongoing impact.


Motivated by our experiences in supporting our clients’ internationalization of their supply chains, and through the analysis of their failures and successes, we were able to identify two theses that we will examine in this GEXSO study.

Thesis 1 – The internationalization process is ongoing; it will accelerate and increase complexity within the supply chain.

GEXSO expects that client bases will predominantly relocate from domestic markets to emerging markets. New clients are the drive behind a shift of supply chain resources. Due to high growth rates within emerging markets, capacity requirements and the significance of supply chain parties increase disproportionately in comparison to those of markets that are already saturated. Global regions become more and more important for sectors such as machinery and plant engineering, and the automotive and industry supplier industries. Product shifts, and the establishment of international production networks through close integration of all production sites, increase the complexity of supply chain management.

Thesis 2 – Successful companies have established globalization competences.

Governance and management of these disparately complex constructs become more and more challenging. Successful organization of an internationalization process requires certain preconditions, concepts, structures and resources to ensure an adequate integration within supply chain organization and supply chain processes. Transparency and controllability are crucial for this process. GEXSO defines these preconditions as ‘globalization competence’ and analyzes their existence and degree of proficiency within the companies. For instance, these include global governance of supply chain standards and processes, a globally accountable and assertive supply chain organization, consistent systems, a global approach to supplier management, the protection of intellectual property, adjustment of the supply chain to local market demands, an internationalized executive strategy, the evaluation of global risks, and many more.

Executive Summary

The participants of the study are currently operating 385 production sites and plan to open 55 new production sites within the next five years. However, the focus of the supply chain shifts to other regions. On average, 40 per cent of all production sites are located in Western Europe today. It is expected that this figure will drop to 36 per cent, and Eastern Asia as well as South American will profit from this change. In Eastern Europe, including Russia, the closings and openings of production sites will be balanced. This result was commented upon in an article by LOGISTIK HEUTE with the headline “The future network of locations” (cf. LOGISTIK HEUTE, issue 10/2012).
A comparison across sectors reveals that production sites of automotive suppliers are more distributed than those of other sectors. Production of the machinery and plant engineering sector is concentrated in Europe, whereas its customers are distributed more internationally. In contrast, clients of the automobile suppliers are more concentrated in Europe. However, regarding their procurement sectors, all companies expect an increase in Asia and South Asia. Within the respective industries there is general agreement about the globalization model: All companies keep the ratio of production sites outside of their base region consistent in relation to the total number of their production sites. Therefore, they also keep their supply chain resources distributed to a certain degree.
Consequently, companies participating in the study seek to maintain a comparable balance during internationalization progress that corresponds with the current globalization degree of their business. They operate in a centralized manner: A major part of their corporate decisions are made predominantly centrally.
Multinational organization models with largely localized decision and product structures are rather exceptional. The GEXSO index depicts the utilization ratio of established procedures in four core areas of supply chain management (customer and market orientation, supplier management, flexibility and information & communication). According to the index, only three companies demonstrate outstanding globalization competence and can be labeled as ‘champions’. Considering increasing supply chain complexity due to international expansion, the machinery and plant engineering sector seems to be less competent in implementing consistent supply chain processes, methods and procedures than the automotive suppliers. Automotive suppliers seem to be more capable of successfully implementing internationalization processes, and demonstrate a higher maturity level in most process areas. The different sizes and facilities of the companies are one possible explanation for this result. Overall, many companies achieved a good process maturity over various sections of the GEXSO index. However, a significant number of the participating companies achieved notably lower results than the reference group in all sections.

Weak points
The following paragraph lists areas where all participants tend to demonstrate weak points:

    1. Many companies do not differentiate their supply chain according to local customer demands, and they rarely involve clients in the organization of their supply chain strategy. This applies to all companies involved.
    2. There is still potential for improvement in supplier management, particularly in the configuration of a development process for international suppliers.
    3. Globalization results in internationalization of product and process knowledge; the necessity to protect intellectual property is generally recognized. At the same time, supply chain partners are rarely involved in the organization of mutual precautions.
    4. In terms of flexibility, a lot of companies question a swift accomplishment of a global supply chain organization. Simultaneously, a high level of in-house manufacturing complicates the ability for flexible adjustment in many companies. The role of a global supply chain manager is not adequately valued by some participants of the study and is still expandable.
    5. International aspects are already addressed within human resource planning. However, most companies do not offer sufficiently organized international career planning.
    6. Risk management is a crucial topic for the management board. Nevertheless, according to their own statements, only half of the participating companies follow a structured process regarding risk management, and less than half of the participants actively control risks.

In summary, it is evident that the globalization trend remains of vital importance to all participants. Globalization competencies that are essential for an effective internationalization exist to varying degrees from company to company. Automotive suppliers generally demonstrate a higher degree of maturity compared to companies in the machinery and plant engineering sector.

The demography of the study

The depiction of the examined industry sectors is quite balanced as 47 per cent of the participants are machinery and plant manufacturers and 53 per cent belong to the automotive supplier industry. Companies of various sizes participated in the study. These were divided into four classes according to their revenue: up to EUR 250 million, up to EUR 499 million, up to EUR 1,000 million and over EUR 1,000 million. More than 59 per cent of the interviewed companies generate a turnover of EUR 500 million or more. Thus, the majority of the participants are medium-sized or large-scale businesses.


GEXSO also classified the participating companies according to their number of employees: companies with 1,000, up to 5,000, up to 10,000 and more than 10,000 employees. The majority of the participants were large companies. 38 per cent of the companies employ more than 5,000 people. The revenue per employee is mostly between EUR 100,001 and EUR 200,000 (44 per cent). 46 per cent have a higher revenue per employee and ten per cent a lower one.


The participants of the study were categorized into four production types: Piece production, small series production, large series production, and mass production. Nearly half of the participating companies are mass producers that operate order-specifically according to a make to order approach. According to a sector-specific analysis of the companies, 77 per cent of the automotive suppliers produce in large quantities whereas the machinery and plant manufacturers generally rely on small series and piece production.

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Successfully leading within a global production network – experiences of European industrial companies during the globalization of their supply chain.

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