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

Vincent Frigant

Cahiers du GREThA (2007-2019) from Groupe de Recherche en Economie Théorique et Appliquée (GREThA)

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.

Keywords: modularity; supply chain; industrial architecture; SME; automobile. (search for similar items in EconPapers)
JEL-codes: L23 L24 L62 O33 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:grt:wpegrt:2011-27

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