Future Outsourcing Needs to be Strategic, Not Transactional

My last column, “Strategic Planning for Global Supply Chains in a Fragmented World” was written to advise managers regarding recent tariff initiatives. This article seeks to explain how we got here, and what incentivized executives to outsource to the Far East. I reveal how a focus on financial metrics like Return on Assets has driven the move to outsourcing at the cost of American workers and in-house manufacturing expertise that, once outsourced, is difficult to regain. Strategic downsides to such moves are discussed, including the tendency for foreign countries to acquire the Intellectual Property of outsourcing countries and replicating their products, as well the risk of critical supply shortages the likes of which were seen during ...