
302 Principles of Supply Chain Management
Outsourcing
One of the major trends in supply chains in recent years is the movement toward offshore
outsourcing. This strategy has extended supply chains around the world. While offshore
outsourcing has made it possible to reduce costs, at least for direct product costs, it has
increased lead times and complexity of supply chains. In addition, it has increased the risk
of supply chain disruption.
Outsourcing is not new. It is “the process of having suppliers provide goods and services
that were previously provided internally. Outsourcing involves substitution— the replace-
ment of internal capacity and ...