In my experience, I have witnessed the same “CEO forces” direct the behavior of a sourcing team on a very large scale. In a recent experience, bonus and other incentives for Senior Management and Executives were based on executing transition plans to move a specific % of work content to a short list of “Low Cost Source” countries. The opportunities pursued to develop in-house and outsourced manufacturing arrangements were highly influenced by the list. In fact, although some partners with excellent long-term potential existed in true low cost regions, they were quickly excluded from consideration since the locations were not on “the CEO’s list”. Rather than challenge the political system, very qualified strategic sourcing managers would prefer not to bring these great opportunities up for discussion.

Interestingly enough, I have also seen the opposite behavior occur with Top Level dictates that work be brought back to the US. This example was more associated with surviving the downturn and optimizing overhead absorption on lower volumes. It’s tough to manage manufacturing and supply chains like yo-yos with major moves that are only supported with short term business cases.. and may not be sustainable for at least the medium term.