Chapter 15 Sourcing Decisions in a Supply Chain

Learning Objectives after reading this chapter, you will be able to

1. Understand the role of sourcing in a supply chain.
2. Discuss factors that affect the decision to outsource a supply chain function.
3. Identify dimensions of supplier performance that affect total cost.
4. Describe the benefits of sharing risk and reward.
5. Design a tailored supplier portfolio.

In this chapter, we explore various factors that influence decisions about whether a supply chain activity is performed within the firm or outsourced. We also discuss performance characteristics of suppliers that affect total cost. Our goal is to enable managers to consider all the trade-offs involved when making sourcing decisions to maximize value extracted from every stage of a sourcing relationship.