UT Study on Global Supply Chain Sees Reversal of Outsourcing Trend
The rush to Asia in the past decade promised major cost reduction for supply chains, but financial gains for many corporations have been short-lived according to a new study by The University of Tennessee’s Global Supply Chain Institute (GSCI). The study uncovers the downsides of outsourcing by putting the complexity and risk of the global environment into context.
Evidence from the research, compiled in Global Supply Chains, the fourth installment in the Game-Changing Trends in Supply Chain series from supply chain faculty, suggests a more localized supply chain for many products may soon be making a comeback.
The paper suggests that streamlined global supply chains are still efficient for companies with complex technology and low logistical costs. However, supply chain network design must change and adapt as the world changes. The report highlights communication and visibility across the entire supply chain as a consistent element in successful businesses.
The research suggests that supply chains throughout the world will eventually break into a series of “pods,” where regional procurement and manufacturing will supply the demand centers of the area with a significant percentage of its production needs.
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