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Local sourcing strategy

Dive into the pros and cons of sourcing locally

Pros of sourcing locally

It’s important to remember that each organisation is different, so a local sourcing strategy may not be suitable for everyone. However, if you are thinking of sourcing locally, look at some of the advantages it has.

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Cons of sourcing locally

Take a look at some of the disadvantages of sourcing locally which you should consider before adopting a local sourcing strategy within your organisation.

  • Core products, raw materials or specialist skills may not be located locally to your organisation.
  • Labour costs may be higher in your local region.
  • Close supplier/staff connections can lead to issues with ethical supplier selection
  • Undesirable local publicity can arise when contracts need to be terminated: If you no longer want to renew a contract with the local supplier, this could cause bad PR for your organisation.
  • Possible resistance to change: If you once sourced your goods globally and are now opting for a local sourcing approach, business practices change. This could lead to a resistance in change and staff not being on board with the decision.
  • Supplier may be dependent on you: It can often be difficult for the supplier to do business with a competitor, making them heavily reliant on your organisation’s business.
  • Policy issues around encouraging competition and positive discrimination of local suppliers
  • Limited choice: With an increasingly competitive market, sourcing locally means you are limited on choice, which could come at a price. Sourcing globally helps to reduce costs where you are sourcing from a country that has increased manufacturing capacity or lower labour costs.
 

Sourcing strategy

Learn how to develop your sourcing strategy and the importance of finding value within the supply chain.

Sourcing key themes

Sourcing Strategy Strategic sourcing Strategic sourcing benefits Direct sourcing
Direct sourcing strategy Local sourcing Ethical sourcing Ethical sourcing strategy
eSourcing Single vs sole sourcing Global sourcing Outsourcing

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