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The drive for lower process costs and better margins has driven the outsourcing of product manufacture, often from the Far East. It is possible that this form of outsourcing has peaked, given the increasing emphasis on carbon footprints and the more pragmatic reason – that of difficulties in managing sourcing over much extended supply chains. The risks involved have often been mitigated by raising stocks and suffering reduced market flexibility, both of which reduce margins. It is therefore the pursuit of higher margins that caused companies to pressurize their outsourcing partners to collaborate, to increase asset utilization whilst still increasing customer service.


Cover of Global Logistics, 7th Edition