The procurement of raw materials, machines, their components, and any third-party service from within the same country is called domestic sourcing. In one of our previous posts, we have talked about the downsides and upsides of domestic sourcing. In this two-part post, we will focus on how your enterprise can make the most of domestic sourcing.
Order in Smaller Quantities
When you are sourcing from domestic vendors, you have the room to make your order smalls. By keeping your orders small, you can free up your resources for other operational needs. For instance, you don’t have to stress over storage and warehouse management and keep your focus on production and delivery.
Use Domestic Sourcing for Unpredictable Product Demand
There are many products for which the demand forecast fails. The sourcing for all such products becomes tricky because you can’t pin down the right amounts. Leverage the shorter lead times and smaller order availability from local suppliers to take care of unpredictable product demands.
Take the Edge off of Taxes and Tariffs
Some items and materials cost more when you source them from international suppliers due to relevant taxes and tariffs. Scan through your procurement items, and identify the ones you have to pay heavily in import taxes. After that, search for local suppliers that can offer you similar material in good quality without margin-reducing taxes and tariffs.
Use Domestic Sourcing in Branding and Promotions
By sourcing all your stuff from within the country, you can raise a winning point in your branding and marketing. You can say that your products are 100% made in Canada. This claim can appeal to a large chunk of your local market.
To streamline your domestics sourcing, you should deploy SimplyPurchasing in your procurement department. This robust procurement management software works on many fronts to improve organizational performance. It improves the procurement process and helps you get a better hold of sourcing and contract management.