Working as a subsidiary in a large multinational comes with it positives and negatives. The positives are many such as the availability of resources, funding and corporate functions that a subsidiary does not need to worry about, as the parent entity has this covered. It can feel restrictive however, with teams feeling they are very limited in what they can do, even if they feel they and their teams have a lot more to give.
A useful article I covered in a recent MBA which covered this topic was that of the Ed Delany model for strategic positioning of a subsidiary to its multinational parent. Here it depicts a number of stages of how a subsidiary can evolve from the initial, basic mandate of what the subsidiary is set up to do; to an enhanced mandate; and then ultimately to being a strategic pivot or apex for the multinational.
There are many examples of subsidiaries to LMNCs expanding in this way, building trust over years, a capacity to deliver and showing the value of the team they have and what they can do. The article shows some great examples of this with many Irish examples.
With a supply chain context, I think this is quite relevant and contemporaneous. Most LMNCs operating in Ireland now have well established global standards, systems and expected methodologies to be followed. In that lies an opportunity for supply chain functions based in Ireland. Establishing excellent supply chain capabilities & delivery excellent results are a way of showing the basic mandate being delivered. Developing the capabilities further, and establishing the Irish subsidiary as a best-practice, or center of excellence for supply chain is a good strategic intent for the subsidiary that can play well for a LMNC’s global strategy. Demonstrating the real capability to adapt to changing scenarios, new technologies, and deliver to strategic targets in a way that the company has struggled to do globally is certainly and area that fits with stages 4 & 5 of the model below.
As more of a company’s funding is expected to move to being ESG focused in the coming years.. this capability will grow in its strategic importance.. and so it can also be a very strong capability for an Irish subsidiary to develop into the higher stages as they demonstrate excellence in supply chain performance.
All in all, I think the Delany model is a great reference point to show why an Irish subsidiary should invest in supply chain capabilities, should think strategically about it and the fit to both subsidiary and the parent LMNC.. and why this makes sense as vision for local teams to get behind an initiative like a supply chain transformation.
