Someone (who's post I can't currently find, I'm sorry!) suggested the idea of using caravans to move local resources, by building something at each end of the supply line in the city (depots, or some such). I like this idea, and want to expand on it.
Suppose you have a kingdom with 3 ore in your control. Suppose that, in order to build magical arms and armor, you had to have ore treated with crystals and some other resource (a total of 3 resources together in the same place). Then you could (with the right research) produce magical steel arms or armor.
Why not use the current mechanism of limited caravans to control that? If you need 3 resources all in one place, the chances of one town being close to all three of those resources is low; you'll have to move them. So you burn your caravan lines getting the resources all to one town. It would work this way.
Build a caravan in City Ore. Send it to City MagicArms. On the map, it generates a supply line as it moves, and after one trip, the caravan is consumed, an Ore Depot is built in both City Ore and City MagicArms. Before you build the OreDepot in City MagicArms, however, you build your blacksmith, because you'll need to build your Ore Depot next to the blacksmith in order to get the bonus.
Same thing for City Crystals and City OtherResource. Now, in your one town, City MagicArms, you have a Blacksmith surrounded on the map with an Ore Depot, a Crystal Depot, and a OtherResource Depot. It can now make MagicalArms at a certain rate as a new resource. You can ship those arms (through the Caravan of City MagicArms) to another city that is collecting for magic armor to make very high end units.
The supply line, once created, appears on the map, and can be attacked by an attacker. It's a moving dot that moves back and forth, and supplies a certain number of Ore to City MagicArms every turn. If you kill it, City MagicArms loses the ability to create magic arms (no more supply line, you can't stockpile that resource, you can only redirect it).
You also are limited by the caravan mechanic, since you can only have so many caravans (one per city), so you have to decide how best to implement your trade web to get resources around your empire. It can be reconfigured at the cost of the travel time for the first caravan move which lays the new supply line at whatever rate the caravan moves at.
You don't have to micromanage; you have to set up your trade web and reconfigure it over time (like research; pick a research target, and work on it until done, then reconfigure). The fun would be in figuring out how to optimize raw resource layout of the map into the best production layout to build the strongest armies.
If the mechanic works, then maybe you use it for things other than just ore for armies. Maybe you move magic around through a "magical trade web" that accelerates your research, a "spy trade web" that helps diplomacy, or what have you.
Did you ever play Capitalism? With a couple of UI improvements that seems to be pretty similar to what you're describing. Here's how it worked:
You start with a retail store. It can do a couple of things: buy products from suppliers, and sell them to customers (or in Elemental's case, import equipment and give it to units). The "purchase" unit of the store can buy from anywhere, even another store. Usually it would come from a supplier of some sort.
If you wanted to sell beef? You could buy the beef from someone else, or build a farm and start raising cows. The farm has abilities to grow cattle, slaughter it, store inventory (like a warehouse), and then sell the result (to another building, only stores can sell retail in the game). Now, what if you wanted to make milk?
You raise cows. You milk the cows. You now have raw milk. You can't sell raw milk though. At this point you set up a factory which buys the milk and glass bottles, and manufactures bottled milk. You sell THAT to a store.
This can actually chain to fairly high complexity. You build a silica mine, which you send to a factory to make silicon. You send that back through the factory (or to another factory) to make CPUs. You build an oil well to get oil, which you use a factory to make into plastic. Along with some other components, you use a final factory to assemble PDAs, which you can then sell.
Each unit in a building has a certain capacity, so a manufacturing unit can produce X CPUs per unit of game time. The purchasing unit can buy Y silicon to supply the manufacturing, and the sales unit can sell and ship Z CPUs to whoever is buying them. Training can increase those numbers, as can setting up more of one type of unit (if stuff isn't buying fast enough, you can add a second purchasing unit for example).
Stuff winds up being shipped all over the map under a system like this, and there's quite a lot going on under the hood. It doesn't have to be exactly THIS complicated in Elemental, but the fundamental system is sound and quite a lot of fun. The main thing it needs is a UI improvement: where I can go and say I want to make "+2 Holy Avengers", and the game can hook up the necessary supply lines to make it happen. Having to manually tell 5 things to ship to one city so I can do it is tedious. (The biggest issue with Capitalism's UI is that I couldn't make a factory and say "make bottled milk". I had to set it up, then tell it to buy raw milk, and to buy glass. It'd then figure out "oh you want to make bottled milk." For stuff with a lot of inputs that just gets annoying.)
For a game like Elemental, this creates points of interest for wars or espionage:
1. Things like mines are a target, to slow down or cut off the supply chain.
2. Roads and ports are blockade targets, to cut off the supply chain.
3. Key manufacturing cities are obvious important targets, because if one city is capable of making those Holy Avengers 3x faster then any other due to specialization in enchanted item forging, you can cripple someone by taking that city.
4. Really big units are complex and hard to make, which boosts their relative value. It's not safe to try and create super units on a border city due to having to get everything to the far flung corners of the map, so you'll want to do it in your core cities most likely. The border cities can produce simpler units that don't require as much (or any) supply chain.
So if we are going to be looking at this type of system, I like one that works in that way. 