Home > Research in practice > Threats of local sourcing (without a strategic approach)

Threats of local sourcing (without a strategic approach)

Lead times are a major concern when selecting suppliers’: lower lead times induce lower inventories and allow being more flexible.

On the other side competitive pressures (lower costs, higher quality, and innovativeness) drive many companies in scouting suppliers abroad and this practice may cause higher procurement lead times mainly because of geographical distances.

Using data gathered in 2005 from 660 companies operating in the manufacturing industry from 21 countries, we analyzed the relationship between global sourcing and procurement lead time.

What we found in our data is the presence of three groups of companies according to the importance given to suppliers’ physical proximity and level of local sourcing:

Group name

Importance given to physical proximity in suppliers’ selection

Level of local sourcing










Interestingly, among local sourcing companies, there are those doing this strategically (“Patriots”) and those who don’t (“Idlers”). Our analyses show that Idlers have the worse performance, not only in terms of procurement lead time, but also manufacturing lead time, delivery speed and manufacturing conformance.

On the other side Globals and Patriots are able to keep similar performance. Globals tend to use share more information and use eBusiness tools with suppliers while Patriots rely more on Just-In-Time practices.

In conclusion, this study highlights the importance of choosing carefully a local/global sourcing strategy and to consider how it can be supported by leveraging on right supply chain management tools.


Golini, R., Kalchschmidt, M., 2009. Threats of Sourcing Locally Without a Strategic Approach: Impacts on Lead Time Performances, In: Gerald, R. (Ed), Rapid Modelling for Increasing Competitiveness, pp. 277-292

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