Exploring the Role of Taxes & Duties when Designing Global Supply Chains

Supervisor: Dr Lorenzo Prataviera

Applications are invited from potential PhD students with a background in operations management, logistics and supply chain management or general management who have an interest in advancing the science of global supply chain design.

Global supply chain design is experiencing significant changes because multinational corporations (MNCs) are increasingly adopting an integrated approach where logistics and fiscal aspects are considered simultaneously (; Prataviera et al., 2020a). Legal systems determine the playing ground rules for global companies when designing their supply chains, but tax-related costs require careful managerial consideration (). Logistics and fiscal domains are driven by different principles, and frictions may arise.

For example, tariff engineering (or customs planning) is the proper structuring of manufacturing and distribution operations to achieve the lowest dutiable value and the lowest effective duty rate (while maximising compliance with customs laws) (). However, there are increasing concerns about the trade-off between cost and (complexity and risk) because every border that is added to the equation increases risks ().

Also, the well-known organisational concept of postponement must be revisited when designing postponement strategies for global supply chains. A geographical perspective must be taken into account, as the location where operations take place can have a major impact on the companies’ overall performance (). Specifically, determining what activities could be performed in the global distribution network, rather than in the centralised factories, has been termed as the “postponement boundary problem”.

Lastly, some companies started to develop operating models (OMs), which might be defined as a set of guiding principles for global supply chain design aiming at overall tax optimisation and building “tax-efficient supply chains” (). However, defining how to deliver value to customers, how to invoice (and later collect from) them and how to consolidate profits or losses into a centralised legal entity through transfer pricing is critical ().

Potential Research Topics Include:

Illustrating and describing the role that taxes and duties play when MNCs design their global supply chains, and examining how their changes over time can affect global logistics efficiency.
Investigating how firms globally design value-adding operations in their supply chains, and how they might apply global postponement strategies.
Exploring the relationship between the risk and fiscal perspectives to increase the understanding of value-adding distribution worldwide.
Exploring how MNCs design operating models to harmonize worldwide procedures.

The research work can take any shape, from in-depth qualitative case-based work to network analysis and quantitative studies in tackling some of these issues. You will be expected to join the current research debates and make an original contribution that will both advance the science of global supply chain design and be relevant and useful for practitioners.

Candidate Profile Details

Candidates should have experience in supply chain management at managerial level; however, candidates with other industrial backgrounds will also be considered. Candidates who have experience and knowledge about fiscal and legal issues in supply chain management will be preferred.

Application

The successful candidate is expected to submit a research proposal which addresses the current state of debate in global supply chain design research, setting out:

A preliminary research agenda as a guide to discussion, indicating what reading you have so far done around the topic.
A list of proposed research questions.
The research methodologies to address these questions, including a draft plan for data collection and data analysis.

Contact Details

Expressions of interest alongside a CV are invited via email to Dr Lorenzo Prataviera in the first instance.

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