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.
