Design for Globalized Green Supply Chain Networks with Nearshored Production

Pp. 185-203 (19)

Eleftherios Iakovou, Dimitrios Vlachos and Maria Chatzipanagioti

Abstract

Lengthy and highly variable customs’ clearance processes and service times at ports of entry, along with the associated emissions generated from transporting cargo from far away production sites can severely erode the efficiency of offshoring within global supply chain networks. Nearshoring, namely the practice of allocating manufacturing capacity next to demand points, is a corporate countermeasure to such concerns. This paper proposes a novel, Total Landed Cost decision-making methodology for the identification of the optimal mixture of nearshore/offshore production capacity allocation and the optimal port of entry, while taking into account free trade and sustainability-related issues for global supply chain networks. Various “what-if” analyses of interest to practitioners (C-level executives, corporate planners, and regulators) are conducted, and interesting managerial insights are discussed.

Keywords:

Supply Chain Management, Global Supply Chain Network Design, Green Supply Chains, Sustainability, Supply Chain Sustainability, Logistics Performance, Logistics Performance Index - LPI, CO2 Emissions, Lead Time Variability, Nearshoring, Offshoring, Reshoring, Global Transportation, Manufacturing Capacity Planning, Strategic Decision-making, Offshore Capacity Allocation, What-if Analysis, Case Studies, Model Development, Strategic Emergency Stock, International Trade, Trade Facilitation.

Affiliation:

Laboratory of Quantitative Analysis, Logistics and Supply Chain Management, Department of Mechanical Engineering, Aristotle University of Thessaloniki, P.O. Box 461, Thessaloniki 54124, Greece.