Capacity: Flexible manufacturing strategies include short scheduling horizons and fixed cycle manufacturing programs. However, extended global chains are less able to benefit from such flexibility due to the inherently long lead times. Also typical global suppliers end up with extended schedules due to conflict of interest from large number of buyers. Large expectations can lead to over-commitment of capacity which can become idle later.

Inventory: In the context of shortening market lifecycles and longer lead times in global supply chains, inventory may become more of a risk than a buffer.

Dual sourcing: In recent years the number of vendors has been consolidated to get better cost reductions and to operate more collaboratively over a long term horizon. The risks inherent in global supply and the challenges in finding and establishing multiple vendors makes the dual sourcing approach even less likely, thus increasing long term dependency and hence risk.

Distribution and logistics alternatives

Other back-up arrangements

Next

11 Alan Braithwaite, "The Supply Chain Risks Of Global Sourcing", http://www.lcp-consulting.com, 2003.

* Contributed by -
Krishnakanth K. K. & Pankaj Ghai,
PGP Students.
IIM Lucknow.