An enterprise needing a product or service can either go with local or global sourcing.

Since both terms are pretty self-explanatory, we will directly jump to the local vs. global sourcing debate and discuss the upsides and downsides of these two sourcing approaches.

Local Sourcing

Upsides

Shorter Lead Time: Geographical proximity is one of the most significant advantages of working with a local supplier. You can source an item within a day or a couple of days when you partner with a local supplier.

Lesser Shipping Cost: Geographical proximately also comes into play in determining the shipping cost. You have to pay considerably less for sourcing when it is happening within the country.

Better Supplier Management: You can easily meet suppliers, engage with them, and visit and inspect their facilities when you do local sourcing.

Downsides

Quality Compromise: You may not find the required quality and manufacturing compliance from local suppliers.

Scaling Constraint: Most local suppliers might not have the capacity to scale up their operations according to your requirements.

Global Sourcing

Upsides

Better Technology/Quality: Global suppliers attract worldwide buyers because they offer the latest and the best the relevant industry has to offer.

Exchange Rate: Placing orders to suppliers in countries whose currency value has less value than yours will let you leverage the exchange rates.

Downsides

Extended Lead Time: An item coming from overseas will take more time to reach your warehouse/facility.

Higher Shipping Cost: It costs more to source an item from another country and continent thousands of miles away.

Local Tariffs and Taxes: You have to clear the relevant trade tariffs when you source from an international supplier.

Whether it local or global sourcing, SimplyPurchasing helps you streamline your procurement operations with its host of management features.

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