Geographical proximity and supplying relationships in modular production

Vincent Frigant and Yannick Lung

International Journal of Urban and Regional Research, 2002, vol. 26, issue 4, 742-755

Abstract: The geography of the automotive industry has changed in recent years. This article focuses on the changes that are associated with ‘modular production‘, whose diffusion has reinforced the need for proximity between auto–makers and parts–makers. The new geographical configurations that have cropped up, especially in the field of assembly operations, are based on spatial contiguity. On one hand, this spatial and organizational contiguity comprises a move away from former methods for managing vertical relationships; on the other hand, it has transformed the role that geographical proximity plays in the coordination of such activities. Such a co–evolution needs to be interpreted. Following a brief description of recent experimentation in this area, we try to determine how geographic proximity can drive the emergence of new methods for coordinating vertical relationships by highlighting some of the opportunities for organizational innovation that can result from proximity. Several factors will be discussed: the management of the logistical constraint; the convergence of representations; the site specificity by which vertical relationships can be stabilized; the different ways in which employment relationships can be managed; and the limits of all of these factors. We highlight both the benefits and the shortcomings of geographical proximity by drawing certain conclusions from the first experiments that the automobile industry has conducted. Cet article analyse les évolutions récentes concernant la géographie de l’industrie automobile autour de la ‘production modulaire‘. Cette production modulaire se traduit en effet par le renforcement de la proximité entre les constructeurs automobiles et leurs fournisseurs de premier rang, notamment par la recherche d’une contiguïté spatiale dans la phase d’assemblage. Cette contiguïté spatiale et organisationnelle marque une rupture à la fois dans la gestion des relations verticales et dans le rôle conféréà la proximité géographique au sein du processus de coordination de ces activités. Une interprétation de ces évolutions conjointes s’avère nécessaire. Après une brève présentation de quelques expériences récentes, le papier s’attache à préciser comment la proximité géographique participe à la construction de ces nouveaux modes de coordination des relations verticales, en spécifiant les opportunités d’innovations organisationnelles qu’elle suscite. Nous discutons des différents facteurs et de leurs limites: la gestion de la contrainte logistique, la convergence des représentations, la spécificité de site pour stabiliser les relations verticales, la gestion des relations salariales sur un même site. Nous soulignons ainsi les avantages et les limites de la proximité géographique en tirant un premier bilan des expériences engagées dans l’industrie automobile.

Date: 2002
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https://doi.org/10.1111/1468-2427.00415

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Working Paper: Geographical Proximity and Supplying Relationships in Modular Production (2002)
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