There is no simple answer regarding which products or components should be domestically sourced as a number of the criteria are somewhat qualitative. Table 1 lists the general sourcing criteria. The final determination depends on the specific item and the firm’s expertise. As firms increase their global operations and marketing efforts, logistics managers should be increasingly involved to provide a realistic assessment of the total cost and performance implications.
With increased interest in low cost country sourcing, logistics professionals will be required to determine and evaluate the trade-offs associated with such decisions. Not only should the procurement and manufacturing costs be considered, the logistics costs and risks must also be considered. As discussed previously, this requirement represents both a challenge and an opportunity for professional logisticians. In addition to understanding the cost components, logisticians will need to develop methodologies that can effectively determine imputed costs related to low cost country risks.