What trend are managements currently tending towards?

The current trend among managements is to focus on buying parts outside their core competency, which allows companies to leverage the strengths of specialized suppliers. This approach aligns with the principles of supply chain management that emphasize efficiency and effectiveness. By outsourcing non-core components or services, organizations can concentrate on their primary operations, thereby enhancing their competitive advantage.

Companies often find that relying on external suppliers with expertise in specific areas can lead to improved quality, innovation, and cost efficiency. This trend is also driven by the globalization of markets and the need for flexibility in supply chains, enabling firms to respond rapidly to changes in demand and technological advancements.

In contrast to expanding vertical integration, which involves taking control of more of the supply chain, this strategy of sourcing from external providers allows firms to remain nimble and adaptable in a rapidly changing business landscape. Similarly, while increasing local sourcing and conducting all services in-house may create benefits in specific scenarios, they do not capture the overall trend of leveraging external expertise for non-core activities.