What About Domestic Sourcing?

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Globalisation and the internet has provided businesses with the ability to increasingly source goods from anywhere on the planet. Access to products at often considerably lower prices makes importing goods an appealing option for many enterprises.

Overseas markets with lower wage costs and fewer government or industry regulations can produce goods and manufacturing inventory components at reduced prices.

That said, the benefits of domestic sourcing should not be overlooked. Particularly when the impact of Brexit is yet unknown and uncertainty surrounds multi-lateral trade agreements such at the Trans-Pacific Partnership.

The benefits of buying local can far outweigh just buying on price. Businesses stand to gain a lot by choosing domestic sourcing over international sourcing.

Benefits of Domestic Sourcing

One of the primary benefits of domestic sourcing is that it provides greater inventory control. Sourcing domestically means companies can check out local manufacturing operations and processes. Additionally, sourcing from your domestic market provides a chance to regularly inspect product quality.

Domestic sourcing also enables companies to be more responsive when opportunities present themselves, supporting companies to more quickly react when issues and challenges arise. It facilitates greater opportunity for face-to-face interactions with producers and suppliers, encouraging mutually beneficial relationships and collaboration with supply chain partners.

By sourcing domestically, you can streamline your businesses procurement and purchasing activities. The more compact your supply chain the greater the ability to reduce logistics, transportation and warehouse needs. Reducing costs and providing your business with more efficient inventory control.

Advantages of Sourcing Domestically

Sourcing locally, will give you greater accessibility to more frequent, smaller batch sizes and order quantities. This means you can reduce the quantities of stock you hold, potentially lowering your inventory carrying costs.

Finding the right domestic supplier provides a greater level of inventory control because closer access to your suppliers helps you to manage quality, negotiate product specifics, pricing, payment and shipping terms.

Businesses can avoid the additional fees and charges incurred through foreign sourcing such as import taxes, duties and port charges. Likewise, avoiding any risk associated with fluctuations in currency exchange rates.

When sourcing manufacturing inventory from domestic markets, your customers can be confident that labour resources have access to a fair work environment, acceptable health and safety practices and a guaranteed minimum wage.

Love Local

Investing locally can be good for business, providing good PR and competitive advantage. It is better for the environment and beneficial to local communities.

Supporting local suppliers offers a point-of-difference and will be perceived as value by some consumers due to it providing job creation, helping local providers to grow their businesses, manufacturing operations, processing and sales activities.

Product safety is paramount and the growing consumer trend toward healthy choices includes the desire for more sustainable products. Domestic sourcing provides greater supply chain transparency and traceability particularly in relation to fresh produce and food manufacturing inventory.

The environmental benefits of domestic sourcing include lower emissions and a reduction in carbon. Less packaging is often required for domestic freight compared to items shipped for international suppliers, helping to lower your company’s overall carbon footprint.

More about the author:

Melanie - Unleashed Software
Melanie

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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