When looking at OPSCM strategies, sourcing is a crucial decision that affects the longevity and profitability of a company. There is a peak globalization point that, if surpassed, becomes detrimental to the countries involved to be point where it has been coined "slowbalization" (Certo, 2021). The key differences amongst these strategies are in ownership and location (Kandil et al., 2021) and are detailed as follows:

Outsourcing - subcontracting some of the company's processes to a third party Offshoring - moving the processes to another country while still maintaining autonomy Insourcing - performing an activity or a process in-house, which implies control as a governance mode, regardless of the geographical location Reshoring - relocating an activity back to a geographically convenient country as the firm's headquarters Nearshoring/backshoring - nearshoring implies a nearby country, and backshoring the same country Although there are many names, the decision rationale boils down to answering the vital question of how to maintain or increase profitability for the growth and survival of the company. Changing any factors that greatly impact profitability and lead to a positive outcome for the business will almost always lead back to innovations and improvements in the supply chain. Certain factors carry more weight and should be prioritized to ensure maximum efficiency, improved performance/output, and minimal or reduced costs. They are as follows, listed in order of most important to least:

Technology/Resources - infrastructure, product/process/organizational innovation, raw material availability, production capacity, intellectual property, and innovation potential Labor - wages, market flexibility, productivity, lack/availability of skilled workers, physical distance, and union pressures Operations - related to quality, lead time, inventory, and the "Made in" effect (one of the most influential drivers for reshoring) Financial - related to cost efficiency including costs of labor, freight, logistics, energy, subsidies and penalties, payment terms, coordination, exchange rate risks, administration, and total cost of ownership A thorough analysis of these individual factors in the context of the current business environment can help visualize and predict how various changes in sourcing will impact the OPSC and success of the company. In choosing to outsource, we can gain the advantages of improvement in cost, product, and possible market share. However, there are disadvantages such as the decline of product and process technology, competencies, and skills, the loss of overall market performance, long-run R&D competitiveness, longer lead times, larger inventories, difficulties in communication and coordination, lower demand fulfillment, and higher transaction costs than planned. Sourcing strategy is a complex multi-disciplinary decision that needs to be reexamined given slowbalization and the changing landscape of the business world.

Questions:

What other factors can you think of or have seen which greatly impacts this decision of sourcing in the OPSCM? 2. Would you agree with my ranking or how differently would you prioritize your list and why?

References:

Certo, P. (2021, February 16). 'slowbalization': Is the slowing global economy a boon or Bane? Foreign Policy In Focus. Retrieved March 23, 2023, from https://fpif.org/slowbalization-is-the-slowing-global-economy-a-boon-or-bane/

Kandil, N., Battaia, O., & Hammami, R. (2021). Globalisation vs. Slowbalisation: a literature review of analytical models for sourcing decisions in supply chain management. Annual Reviews in Control, 49, 277-287.

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In addition to the factors youve mentioned there are several other considerations that can significantly impact sourcing decisions in Operations and S... View the full answer