Tag: supply chain disruption

OM in the News: Beyond Outsourcing–Why Best-Shore Is Reshaping the Future of OM

For more than three decades, outsourcing followed a simple logic, moving work to lower-cost locations to reduce expenses and gain efficiency, writes Material Handling & Logistics (July 24, 2026). That model delivered real benefits, but the business environment has changed. Organizations now face pressure to innovate faster, strengthen resilience, protect worker safety, and meet increasingly complex regulations.

Instead of focusing solely on low-cost offshore outsourcing, organizations are adopting to a best-shore strategy, an approach that evaluates the nature of the work and places it in the location that delivers the greatest overall business value. The best-shore model recognizes that cost matters, but so do collaboration, speed, resilience, compliance, talent availability, and operational continuity.

Supply chain disruption, cybersecurity threats, geopolitical uncertainty, workforce shortages, regulatory change, and rising customer expectations have created new challenges that traditional outsourcing models were not designed to address. The lowest-cost location is now not always the lowest-cost solution.

A manufacturing plant cannot afford prolonged downtime because a critical engineering issue must wait until another region wakes up. A logistics operation cannot delay responding to a cybersecurity incident due to communication barriers.

Under the best-shore approach, organizations leverage a combination of offshore, nearshore, and onshore resources, assigning responsibilities based on business requirements rather than geography alone. Best-shore models incorporate three complementary delivery layers.

Offshore: Scale and Cost Efficiency Offshore delivery remains an essential component of global operations. Countries with large technical talent pools offer access to skilled professionals at competitive costs. Offshore teams often provide the scale necessary to support large transformation programs, application development initiatives, engineering projects, testing activities, data management, and managed services.

Nearshore: Speed and Collaboration Nearshore delivery helps bridge the gap between cost efficiency and operational responsiveness by locating teams in similar time zones and cultural environments. Teams can collaborate during the same business day, participate in real-time meetings, respond quickly to changing priorities, and engage more directly with business stakeholders.

Onshore: Governance and Business Alignment Certain activities benefit from being located close to the business itself. Executive engagement, regulatory compliance, stakeholder management, strategic planning, safety oversight, and customer relationships often require local presence and a deep understanding of business context.

Recent years have demonstrated how vulnerable organizations can become when they depend too heavily on a single geography, supplier, or operating model. A diversified best-shore model helps reduce concentration risk.

Classroom discussion questions:

  1. Summarize the differences between best-shoring and off-shoring.
  2. Provide an example of a firm that has best-shored.

 

 

Guest Post: What a Chinese Drone Ban Means for U.S. Farming

Dr. Misty Blessley is a professor at Temple U. She shares her insights monthly.

DJI, a Chinese company and the world’s largest manufacturer of commercial and industrial drones, faces scrutiny in the U.S. over alleged cybersecurity risks. It is now close to being banned here.

One U. S. business that sells spray-drone kits reported that its challenges began last year when importing DJI drones became significantly more difficult. This uncertainty has caused concern across industries that rely on these tools, from public safety and construction to supply chain logistics. For American agriculture specifically, a ban could cut off access to vital equipment, leaving fields unmonitored, untreated, and risking harvest losses.

DJI drones are favored by farmers as they save weeks of labor by spraying seeds, fertilizer and fungicide from the sky.

Agriculture has adopted drones more rapidly than almost any other sector. Monitoring drones help detect disease and water stress early, while spray drones enable precise application of fertilizer and pesticides during narrow weather windows. They have become crucial for reducing input costs (China is accused of subsidizing their drone industry, which might explain some of the cost differences), protecting yields, and facilitating smooth food movement through supply chains. If imports are halted, many farmers could miss critical windows, leading to lower yields and creating issues along the supply chain, from processors to consumers.

Mitigation Strategies
To prepare, farming businesses should apply lessons learned from managing recent supply chain disruptions:
 Diversify suppliers – Start testing U. S. or non-Chinese alternatives, even if they are currently less cost-effective. Early adoption minimizes dependence.

Stock critical parts – As restrictions tighten, building an inventory now provides a safety buffer.

Use mixed fleets – Combine current drones with alternative technologies like ground sprayers to prevent single points of failure.

Plan operational slack – Stagger schedules or adjust operations to account for potential delays.

Collaborate and advocate – Engage with farm bureaus and trade associations to push for phased implementation, subsidies, or funding for domestic options.
 

Classroom discussion questions:
1• What are the challenges and drawbacks of each mitigation strategy?
2• Considering that the Chinese drone ban is likely, how should user decision-making be updated? (Refer to Module A Decision-Making Tools and consider these facts:◦ Drones can cut labor costs by up to 90% and reduce chemical use by 20–30%. ◦ A high-end U.S.-made drone can cost nearly $30,000, compared to a similar DJI unit costing $6,500).