The benefits of global sourcing as part of a firm’s purchasing strategy have been widely discussed in the academic literature, yet so there are few models that provide a comprehensive risk and cost assessment to guide managerial decision-making. 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: On risk and cost in global sourcing by Matthias Holweg, Andreas Reichhart and Eui Hong. The paper defines three basic cost elements in global sourcing: static, dynamic and hidden cost, and uses this framework to assess the costs and risks inherent in global sourcing scenarios from three different points of view: conceptually, analytically and empirically. It is  paper shows how brings the message across of where to source and where not to source.

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