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.
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.
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.
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.
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.