Think about the baseline requirements.

• Supplier Selection
  • potential supplier identification
  • verification and risk analysis
  • onboarding
• Purchase Order Generation
  • order creation
  • transmission
  • acknowledgement
• Route and Carrier Selection
  • potential route identification
  • potential carrier identification for remote trucking, ocean/air freight, local trucking
  • final carrier selection
  • cross-dock identification
  • FTZ identification
  • route selection based on cost and network balance
  • carrier selection
• Transport Insurance
  • multi-quote obtainment and analysis
  • insurance provider selection
• (Inventory) Financing
• Trade Document Creation
  • export document creation
  • (automated) cargo manifests
  • import document creation, inc. security filings
• Transport & Shipment Tracking
  • loading
  • transit
  • cross-docking
• Importation
  • holds
  • inspection
  • tariffs
• Documentation
  • goods receipt
  • invoice acknowledgement
• Payment, Taxation & Reconciliation
  • payment authorization
  • pre-clearance
  • tax payment
  • supplier payment
  • refund tracking
  • refund collection
  • reconciliation

These are just baseline. Even the most simple global sourcing situation is insanely complicated. On top of this:

• supplier risk analysis is insanely complicated as you have to consider all the supplier risks and supplier location risks
• … as well as the raw material risks that affect their ability to acquire the materials and components they need to produce their product
• carrier risk is also complicated as rapid fuel increases or primary lane closures that cuts off a significant portion of their revenue can take a financially healthy carrier to an almost bankrupt one
• tariff risk is now a thing as one major country in particular changes tariffs on the whims of its leader; outdoing the chaos Brazil charged when it was changing tariffs weekly
• insurance risk is real as the increasing risk of natural and man made disasters has resulted in insurance rates going up
• every year, even though you’re paying more for insurance, more and more exclusions are being added with conflict, war, and piracy on the rise (again)
• export, manifest, and import documentation, as well as tariff filings, are becoming insanely more complicated by the year … with every country and carrier having different requirements
• the countries with e-invoice requirements (clearance and post-audit) tend to invent their own, slightly different, requirements and dealing with global invoices from 100 countries requires 100 different rule sets — that’s why there are vendors that just do global e-invoice compliance
• global e-payments can be complicated as well … not all countries support your favourite e-transfer platform, accept your primary bank’s payment network, or deal with your preferred currency
• VAT/Taxes can be just as difficult to pay, and ten times more difficult to reclaim

So, if you can get the stuff locally, or next door (i.e. one country over), why should you go global?

Especially when the cost argument doesn’t cut it anymore. Even if the model still comes out making the global source cheaper, the cost of risk, which needs to be taken into account as the potential of any multinational experiencing at least one major disruption a year is approaching 100%, means that the losses in any category will eventually exceed the savings (because the chances of a disruption for any major lane or supplier increase over time — you can’t treat it as an independent event because even coin flips aren’t independent — one is 50/50; but if 9 in a row have been heads, the chance of tails is almost 98%).

In other words, if it’s not necessary, does it still make sense?