Emerging Nations Lose Their Luster with Evaluation of Risk and Reward on Localization
Will U.S. manufacturers begin to rethink their sourcing strategies as nearshoring and onshoring become more attractive? It depends on who you talk to.
A new study from the University of Tennessee’s Global Supply Chain Institute suggests that there may be a reversal of outsourcing trends in the coming years as U.S. companies test the local waters. Research by The Boston Consulting Group (BCG) comes to a similar conclusion, while contrarian analysts at AlixPartners sound a note of caution.
Reducing total landed cost was the goal of many U.S. companies moving manufacturing to Asia in the past decade. But that may have been a faulty proof, say researchers at UT’s Global Supply Chain Institute. Evidence from new research, suggests a more localized supply chain for many products may soon be making a comeback.
“Countless factors can harm performance when supply chains are stretched across the globe,” says Ted Stank, UT Bruce Chair of Excellence and one of the co-authors of the study. “The most successful companies evaluate the local variables before jumping into a global supply chain and design a dynamic network less vulnerable to the pitfalls of modern globalization.”
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A new study from the University of Tennessee’s Global Supply Chain Institute suggests that there may be a reversal of outsourcing trends in the coming years as U.S. companies test the local waters. Research by The Boston Consulting Group (BCG) comes to a similar conclusion, while contrarian analysts at AlixPartners sound a note of caution.
Reducing total landed cost was the goal of many U.S. companies moving manufacturing to Asia in the past decade. But that may have been a faulty proof, say researchers at UT’s Global Supply Chain Institute. Evidence from new research, suggests a more localized supply chain for many products may soon be making a comeback.
“Countless factors can harm performance when supply chains are stretched across the globe,” says Ted Stank, UT Bruce Chair of Excellence and one of the co-authors of the study. “The most successful companies evaluate the local variables before jumping into a global supply chain and design a dynamic network less vulnerable to the pitfalls of modern globalization.”
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About the Author
Patrick Burnson, Executive Editor Mr. Burnson is a widely-published writer and editor specializing in international trade, global logistics, and supply chain management. He is based in San Francisco, where he provides a Pacific Rim perspective on industry trends and forecasts. He may be reached at his downtown office: [email protected].Subscribe to Supply Chain Management Review Magazine!
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