International Supply Chain Management (Sourcing Strategies)

As a result of near-shoring activities, enhancement of cultural affinity takes place which acts as a boon to the modern businesses with respect to their value chain activities. The cultural affinity being developed provides strong prospect for the long-term relationship development among the various entities of the supply chain. As a result of this, the supply functions of the companies enhance up to a considerable extent. Finally, it is worthy to mention that the new approach of near-shoring as a sourcing strategy offers cost advantages to the companies. The proximity of time zone allows the companies to reduce the extra amount of work required to match with the time of the entity in other ends of the supply chain. The cultural affinity leads to reduced amount of time spend upon the cycles required for reaching a consensus (Neoris Practical Visionaries, 2010). However, the activities within near-shoring strategy for sourcing are not without risk associated with it. Although it is better to go for near-shoring than off-shoring as according to the contemporary managers, near-shoring cannot lead the companies towards achievement of goal when applied alone. A combination of off-shoring, onsite and near-shoring would provide better result than being used alone. Thus, instead of determining the advantage of near-shoring over off-shoring, it would be beneficial for the contemporary mangers to identify the most effective combination through which goals can be achieved (Bell, 2005). On-Shoring Along with near-shoring, on-shoring has also been evolving as an innovative concept in the businesses where efficient supervision of supply… This essay stresses that the opportunity cost associated with outsourcing at times triggers the interest among the companies to remain preset to this process. This is because through outsourcing the production units can derive the advantage of lower production costs in the developing nations of the world which would not be possible with the process of in-sourcing. Another noticeable disadvantage of in-sourcing is that the focus of the company gets deviated from its core competencies because of in-sourcing. In-sourcing might bring about the necessity of concentrating upon certain activities like that of IT in which the company is not expert at. In such a situation, the time, the efforts and the resources that will be spend over activities other than the core activities would be considered as extra amount of cost This paper makes a conclusion that development of various combinations of the modern sourcing strategies would be essential. The companies can then adopt various means of assessing each of the combinations in a critical way. The combination that anticipates the most effective output for the companies should be selected. These actions of the companies in relation to the adoption of one best sourcing strategy are helpful for both the short-term as well as the long-term prospects of the companies. This is because effectiveness of the sourcing strategies leads towards enhanced competency of the supply functions of the companies which is a competitive aspect in the context of the modern businesses.