The Localization of Supply Chains
References made to the “increasing globalization” seem to be the icing on the cake for a good introduction. But can this mantra be trusted? Firstly, the fall of the Berlin wall led to sudden opportunities for Western companies to exploit pay differentials. During the last years, however, wage growth was substantially lower in advanced countries than in Eastern Europe and Asia. Hence, wages are getting closer to each other! Secondly, globally dispersed supply chains are enabled by low transportation costs. But will transportation costs rise in a peak oil world? And will new regulations aimed at mitigating climate change or enhancing supply chain security push up transportation prices? Thirdly, managers realize that global supply chains are vulnerable, if even an earthquake in Japan can impact manufacturing in Europe. They might increasingly prefer local rather than global suppliers. Is there an “increasing localization”? How can your SCM research contribute, if the answer is “yes”?