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Egyptian pyramid or Aztec pyramid: How should we describe the industrial architecture of automotive supply chains in Europe?

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  • Vincent FRIGANT (GREThA, CNRS, UMR 5113)

Abstract

This article questions a terminology that is frequently used to describe automotive supply chains’ industrial architecture. Since vertical disintegration became a trend in the 1980s, this architecture has been represented using the image of the pyramid. Implicitly, authors have had the image of an Egyptian pyramid in mind, one that is pointed at the top and broad at the base. We will demonstrate that even if pyramids are an appropriate image, in the auto industry the Aztec variant, with its shortened peak and room for SMEs, is more accurate. The paper’s first section – with its more historical focus – explains the birth of the Egyptian pyramid. The section 2 puts forward the idea that the Egyptian metaphor is more misleading than informative. We start by demonstrating that overusing this metaphor will ultimately exclude a number of very strategic companies from analysis. This is followed by a presentation of the findings from a study of 750 French SMEs*, in which it is demonstrated both that some continue to maintain direct access to carmakers and also that the hierarchy of tiers comprising this supply chain features greater porosity than is commonly recognized.

Suggested Citation

  • Vincent FRIGANT (GREThA, CNRS, UMR 5113), 2011. "Egyptian pyramid or Aztec pyramid: How should we describe the industrial architecture of automotive supply chains in Europe?," Cahiers du GREThA 2011-27, Groupe de Recherche en Economie Théorique et Appliquée.
  • Handle: RePEc:grt:wpegrt:2011-27
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    File URL: http://cahiersdugretha.u-bordeaux4.fr/2011/2011-27.pdf
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    References listed on IDEAS

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    1. Vincent Frigant, 2002. "Geographical proximity and supplying relationships in modular production," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 26(4), pages 742-755, December.
    2. Josh Whitford & Aldo Enrietti, 2005. "Surviving the Fall of a King: The Regional Institutional Implications of Crisis at Fiat Auto," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 29(4), pages 771-795, December.
    3. François Fourcade & Christophe Midler, 2005. "The role of 1st tier suppliers in automobile product modularisation: the search for a coherent strategy," Post-Print hal-00262872, HAL.
    4. Richard N. Langlois, 2003. "The vanishing hand: the changing dynamics of industrial capitalism," Industrial and Corporate Change, Oxford University Press, vol. 12(2), pages 351-385, April.
    5. Vincent FRIGANT (GREThA), 2011. "French mega-suppliers’ trajectories during the modular era: some evidences on Faurecia, Valeo and Plastic Omnium," Cahiers du GREThA 2011-20, Groupe de Recherche en Economie Théorique et Appliquée.
    6. Asanuma, Banri, 1989. "Manufacturer-supplier relationships in Japan and the concept of relation-specific skill," Journal of the Japanese and International Economies, Elsevier, vol. 3(1), pages 1-30, March.
    7. Yannick Lung & Boleslaw Domanski, 2009. "The changing face of the European periphery in the automotive industry," Post-Print hal-00388014, HAL.
    8. Ulrich Jürgens & Yannick Lung & G. Volpato & Vincent Frigant, 2002. "The Arrival of Shareholder Value in the European Car Industry A Case Study Comparison of Four Car Makers," Post-Print hal-00204249, HAL.
    9. Vincent Frigant & Jean-Bernard Layan, 2009. "Modular production and the new division of labour within Europe: the perspective of French automotive parts suppliers," Post-Print hal-00381341, HAL.
    10. Helper, Susan & MacDuffie, John Paul & Sabel, Charles, 2000. "Pragmatic Collaborations: Advancing Knowledge While Controlling Opportunism," Industrial and Corporate Change, Oxford University Press, vol. 9(3), pages 443-487, September.
    11. Ulrich, Karl, 1995. "The role of product architecture in the manufacturing firm," Research Policy, Elsevier, vol. 24(3), pages 419-440, May.
    12. Alan O'Sullivan, 2006. "Why tense, unstable, and diverse relations are inherent in co-designing with suppliers: an aerospace case study," Industrial and Corporate Change, Oxford University Press, vol. 15(2), pages 221-250, April.
    13. Thomas Klier & James Rubenstein, 2008. "Who Really Made Your Car? Restructuring and Geographic change in the Auto Industry," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wrmyc, November.
    14. Damien Talbot & Med Kechidi, 2010. "Institutions and coordination: what is the contribution of a proximity-based analysis? The case of Airbus and its relations with the subcontracting network," Post-Print hal-00383257, HAL.
    15. Vincent Frigant & Damien Talbot, 2005. "Technological Determinism and Modularity: Lessons from a Comparison between Aircraft and Auto Industries in Europe," Industry and Innovation, Taylor & Francis Journals, vol. 12(3), pages 337-355.
    16. Vincent Frigant, 2009. "Winners and losers in the auto parts industry: trajestories followed by the main First Tier Suppliers over the past decade," Post-Print hal-00395403, HAL.
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    Citations

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    Cited by:

    1. Vincent FRIGANT & Martin ZUMPE, 2014. "The persistent heterogeneity of trade patterns: A comparison of four European Automotive Global Production Networks," Cahiers du GREThA 2014-24, Groupe de Recherche en Economie Théorique et Appliquée.
    2. Vincent FRIGANT (GREThA), 2011. "French mega-suppliers’ trajectories during the modular era: some evidences on Faurecia, Valeo and Plastic Omnium," Cahiers du GREThA 2011-20, Groupe de Recherche en Economie Théorique et Appliquée.
    3. Liang-Hung Lin & Jian-Feng Lan, 2013. "Green supply chain management for the SME automotive suppliers," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 13(4), pages 372-390.
    4. Vincent FRIGANT (GREThA, CNRS, UMR 5113), 2011. "Three uncertainties looming over the European auto industry," Cahiers du GREThA 2011-34, Groupe de Recherche en Economie Théorique et Appliquée.
    5. Petr Pavlínek & Jan Ženka, 2016. "Value creation and value capture in the automotive industry: Empirical evidence from Czechia," Environment and Planning A, , vol. 48(5), pages 937-959, May.
    6. Vincent FRIGANT & Martin ZUMPE, 2014. "Are automotive Global Production Networks becoming more global? Comparison of regional and global integration processes based on auto parts trade data," Cahiers du GREThA 2014-09, Groupe de Recherche en Economie Théorique et Appliquée.
    7. Vincent FRIGANT (GREThA, CNRS, UMR 5113) & Stéphanie PERES (Bordeaux Sciences Agro, INRA, ISVV, USC 1320 GAIA) & Stéphane VIROL (GREThA, CNRS, UMR 5113), 2012. "How do SMEs to rise at the top of the supply chain? An econometric exploration of the French auto industry (In French)," Cahiers du GREThA 2012-16, Groupe de Recherche en Economie Théorique et Appliquée.

    More about this item

    Keywords

    modularity; supply chain; industrial architecture; SME; automobile.;

    JEL classification:

    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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