Title: Global versus local sourcing for different supply chain networks: an analysis of order unfulfilment rates

Authors: Woo-Tsong Lin, David Chien-Liang Kuo, Li-Yu Chen

Addresses: Department of Management Information Systems, National Chengchi University, 64, Zhi-nan Rd., Sec. 2, Wenshan, Taipei 11623, Taiwan, ROC. ' Industrial Economics and Knowledge Center, Industrial Technology Research Institute, VS000, IEK/ITRI, Room 101, Bldg. 10, 195, Sec. 4, Chung-Hsing Rd., Chutung, Hsinchu 310, Taiwan, ROC. ' Cyberlink Corporation, Taiwan, ROC

Abstract: Global sourcing is currently the most popular method for improving performance throughout the Supply Chain (SC). Because of this, we want to assess whether performance improvement because of global sourcing is true for all SC networks. In this paper, we assess the relationship of SC network types, global versus local sourcing, different levels of supply variation amplification and order unfulfilment rates. A multi-agent based simulation model is used for assessment. Results show that global sourcing alone cannot ensure SC performance improvement. Results also show that there is no best practice for all SCs. A simple trade-off analysis between costs and order fulfilment rates is also taken. This analysis helps diagnose the potential value of global sourcing and provides a framework for making sourcing strategy decisions.

Keywords: global sourcing; supply chain networks; supply chain management; SCM; supply chain performance; multi-agent based simulation; order unfulfilment rates; agent-based systems; local sourcing; sourcing strategy.

DOI: 10.1504/IJSTM.2006.011283

International Journal of Services Technology and Management, 2006 Vol.7 No.5/6, pp.420 - 438

Published online: 13 Nov 2006 *

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