Firms that centralize operational activities during global sourcing are likely to realize lower total cost of ownership, better inventory management, and improved performance to external customers.

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Centralizing operational activities during global sourcing can lead to efficiencies and cost savings in some areas, but it does not guarantee lower total cost of ownership, better inventory management, or improved performance to external customers. These outcomes depend on various factors including the nature of the supply chain, the specific strategies employed, and the execution of those strategies. Decentralization can sometimes offer better responsiveness and flexibility, which are crucial for inventory management and customer service.

Firms That Centralize Operational Activities During Global Sourcing Are Likely