Towards Strategic Supply Chain Alignment: The Four-Dimension Plane

The global marketplace has increased both the length and risks associated with supply chains. Companies are observing additional problems with logistics, lead time, inventory, quality, and intellectual property security (Maher & Tita, 2010). Others are discovering that significant savings in employee costs (a prime reason firms located overseas) have either never materialized, owing to the fact these costs account for only 10% of the total cost of a manufactured good, or have been eroded (Rhanna, 2012). The upshot is that many finns who were lead to produce off­shore are finding that the costs of doing so are outweighing the benefits. A solution that is gaining traction has been to move back, a phenomenon coined onshoring. This trend is not limited to small firms; those such as Caterpillar and General Electric, each with sophisticated approaches to supply chain management are returning, as well. These increased complexities become more important as the market moves away from firms competing against firms to supply chain competing against supply chain. Key in this unsettled environment is ensuring that, from the outset, one's supply chain is aligned to facilitate success and realizing one size does not fit all.