Global supply chains: the cost of sourcing?

Abstract

Today’s business world relies on strategies that have gone beyond the geographical boundaries of one country to become International and in many cases “global”. This has only been made possible by a logistics industry that has not only learnt to manage with lower levels of inventory, smaller batch sizes and more frequent deliveries, shorter lead times and how to do it all at lower transport and storage costs, but to do so on a global scale. The success of global logistics and global sourcing has enabled concomitant success within multinational businesses, but has done so at a cost. Recently people have become more aware of those costs and have began to try to understand, classify and quantify them as a step towards controlling their impact in the future. The aim of this paper is to revisit some of the perceived benefits of globalisation and look at some of the recent attempts to begin to evaluate the possible downsides associated with our ever increasing dependence on global supply chains and the products/materials they make available to us. Whilst it generally accepts the previously posed suggestion that global supply chains can be seen as “sinners” (Griffiths and Savage, 2007), it looks forward to ways of moving them towards “sainthood”