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CHAPTER SEVENEmerging Supply Chain Models

In the middle of the nineteenth century, manufacture was predominantly local: things were made and bought largely within one's immediate area. If you needed something, you would venture around the corner to the local blacksmith, butcher, or wheelwright, and they would make what you needed. As mass production emerged, so did expanded global trade, and supply chains began to shift away from local areas. Manufacture was relocated wholly or piecemeal to other places where there were advantages to be had, such as cheaper labor, proximity to raw materials, or fiscal incentives. Those supply chains became truly global in the twentieth century and, by the end of that period, it wasn't just manufacturing that was sent far away. The end of the 1990s saw an explosion in offshoring other supply chains; service-based jobs in finance, human resources, and information technology were moved away in shared services and call centers that offered companies better cost and service models. It also became common for an item to be designed in one country, have its component parts manufactured in several others, have these shipped to and assembled in another location, and be sold in a totally different market. Those practices lengthened supply chains, making them more complex.

The early twenty-first century has seen a change in that trend: companies are looking to simplify supply chains, to bring their individual elements closer together, and as a result, local ...