Global Sourcing Strategy: An Evolution

Abstract

Abstract Increased global sourcing of manufacturing and service activities from independent suppliers has been a prominent part of the restructuring of firms' supply chains since the late 1980s. Researchers and practitioners have largely supported the view that global sourcing is one of the key drivers of superior performance. However, the limitations of outsourcing, or, put differently, the advantages of vertical integration, also have to be considered. First, we discuss the need to balance sourcing levels. Second, we then discuss how global sourcing levels must achieve a strategic fit with the environment. Third, we synthesize these balance and fit perspectives to suggest how, over time, changes in the fit alter the required balance in global sourcing. From this synthesis, we develop a number of research questions related to important conceptual perspectives on sourcing for future investigation. For managers, we provide indications of how they can achieve a balance and a fit of their sourcing strategies.