A picture says more than a thousand words, and here is one paper that has it all and that literally illustrates the differences between different sourcing strategies, defining three basic cost elements in global sourcing: static, dynamic and hidden cost.
The norm in supply chain management is that variability is detrimental to performance as it causes cost in the form of stock-outs, poor capacity utilisation, and costly buffers. This paper questions this approach and argues that in the light of increasing turbulence a different approach to supply chain management is needed.
