A decision‐making approach for investigating the potential effects of near sourcing on supply chain

Purpose – Near sourcing is starting to be regarded as a valid alternative to global sourcing in order to leverage supply chain (SC) responsiveness and economic efficiency. The present work proposes a decision‐making approach developed in collaboration with a leading Italian retailer that was willing to turn the global store furniture procurement process into near sourcing.Design/methodology/approach – Action research is employed. The limitations of the traditional SC organisation and purchasing process of the company are first identified. On such basis, an inventory management model is applied to run spreadsheet estimates where different purchasing and SC management strategies are adopted to determine the solution providing the lowest cost performance. Finally, a risk analysis of the selected best SC arrangement is conducted and results are discussed.Findings – Switching from East Asian suppliers to continental vendors enables a SC reengineering that increases flexibility and responsiveness to demand unce...