International Sourcing and Local Sourcing

Source products from overseas

In today's competitive global marketplace there are many benefits to importing goods and services, whether you do it regularly or on an ad hoc basis.

Types of products imported:

• Raw materials

• Components/parts

• Finished goods

• MRO (Maintenance, Repair and Overhaul) services

• Technology

Advantages

Sourcing products from overseas may help you to:

• Reduce costs

• Take advantage of favourable exchange rates

• Access products and technologies not available domestically

• Provide product variety

• Offer better quality products

• Overcome domestic shortages

• Reduce dependency on a limited domestic supplier base

Disadvantages

There are, of course, certain risks when importing:

• Financial - currency exchange rate fluctuations and tariffs

• Political - embargoes, sanctions or quotas on imported goods

• Operational - goods arrive late or damaged

• Regulatory - products may be subject to UK or EU standards, and may require product testing and certification

• Cultural - negotiations fail or are delayed because of language and cultural barriers

Plan your requirements

The first step in sourcing products from overseas is to plan your requirements:

• Objectives - what do you hope to achieve by importing?

• Products/services - what do you wish to import? Be as specific as possible

• Additional requirements - will you need after-sales support?

• Warehousing - how and where will you store the imported goods?

• Lead times - how quickly will you need the goods?

• Budget - will importing goods be cost effective? Be aware of hidden extras

Sourcing products

Depending on what products you require and their respective availability you may have a wide or limited choice of suppliers. Key steps to follow:

• Identify countries that supply required product

• Identify specific suppliers from your preferred country(s)

• Assess any country or regional opportunities

• Conduct a financial analysis

• Identify any risks...