When I started in procurement 25 years ago, global sourcing was the talk of the town. Or should that be the talk of several continents? 

In any case, it wasn’t just a trend—it was a genuine transformation. Companies were seduced by the promise of cost savings, driven by cheap labour and abundant raw materials in countries like China and India. Logistics had become so advanced that moving goods across the globe felt seamless, making this model irresistible. Lower production costs meant higher margins, and businesses scaled at unprecedented rates.

Fast forward to today, and the narrative is shifting. What was once considered the epitome of supply chain efficiency is now viewed with scepticism. Rising costs, global disruptions, ethical concerns, and evolving consumer expectations have exposed the cracks in this model. As we approach 2025, the business world is witnessing a remarkable shift back to local sourcing. As much as I dislike the phrases themselves, “re-shoring” and “nearshoring” are taking centre stage, with local sourcing making a remarkable comeback.

The Golden Age of Low-Cost Country Sourcing

In the early 2000s, globalisation was in full swing, and low-cost country sourcing (LCCS) became the standard for competitive supply chains. China, often called “the world’s factory,” was at the heart of it all. With supply chains stretching across continents, businesses enjoyed efficiencies that felt almost too good to be true. However, recent studies have highlighted the vulnerabilities in such extensive supply chains, especially in the face of global disruptions.

Yet, even at the time, there were some concerns. The narrative around LCCS always carried uncomfortable echoes of colonialism, with wealthier nations reaping benefits at the expense of developing ones. While many procurement teams worked to ensure their practices were ethical, these imbalances often lingered in the background.

But as procurement began to address ethical practices, the model gained even broader acceptance. For many, it was a golden age of procurement. Products became more affordable, margins were protected, and companies thrived on the economies of scale.

This strategy worked brilliantly—until it didn’t.

The Catalyst of COVID

For years, supply continuity was almost a given. The sophistication of global logistics ensured products arrived on time and in full, regardless of their origin. This reliability allowed procurement teams to focus almost exclusively on cost savings, with price reductions being the ultimate win.

Then COVID-19 arrived and punched everyone square in the jaw.

In a matter of weeks, global supply chains were paralysed. Delays, shortages, and uncertainty became the new reality. Companies that had relied on single regions for critical supplies were suddenly exposed to severe vulnerabilities. The pandemic underscored the fragility of global supply networks and the need for more resilient, localised sourcing strategies.

The impact of the pandemic forced procurement professionals to reassess their priorities. Cost took a backseat to availability and risk management. Businesses scrambled to secure inventory, often holding far more than they were used to, which added further costs. The realisation hit hard: over-dependence on specific regions was a serious liability. 

Resilience became the new goal.

The Perfect Storm

And it wasn’t just COVID-19. When sorrows come, they come not single spies. But in battalions.

Rising geopolitical tensions—think the US-China trade war, Brexit, and conflicts in Eastern Europe—added complexity to global trade. Extended supply chains reliant on politically unstable regions became untenable. Recent studies have shown that geopolitical disruptions significantly impact global supply chains, necessitating a re-evaluation of sourcing strategies .

Climate change compounded these challenges. Extreme weather events, from floods to wildfires, disrupted supply chains globally. With natural disasters becoming more frequent, long-haul transportation became riskier and less reliable.

To top it off, the financial benefits of global sourcing began to erode. Wages in traditionally low-cost countries have risen, as have raw material costs, transportation expenses, and tariffs. Suddenly, the cost savings that justified offshoring were no longer as compelling.

Consumer Expectations

The reasons for the shift in approach cannot purely be limited to supply-side factors. Consumer demand and behaviour have also played a very important role.

Over the past decade, people have become far more concerned about the ethical and environmental impacts of the products they buy. Customers now expect brands to align with their values, focusing on sustainability and fair treatment of workers. The carbon footprint of shipping goods across the globe doesn’t sit well with today’s environmentally conscious consumers.

There’s also the question of transparency. Global supply chains can make it difficult to verify that labour conditions meet ethical standards. When a company gets it wrong, the backlash can be brutal, potentially ruining years of carefully built brand loyalty. Local sourcing, by contrast, offers a more sustainable and transparent approach that resonates with modern consumers.

The benefits of local sourcing are becoming increasingly clear. Shorter supply chains reduce dependency on intermediaries and allow businesses to respond more quickly to unexpected events. This flexibility makes local supply chains more resilient, particularly in times of crisis. On the environmental front, sourcing locally slashes carbon emissions tied to transportation. It also creates opportunities for businesses to work more closely with suppliers to ensure compliance with ethical and sustainability standards, which helps build trust with consumers.

The Role of Technology

Another significant factor is the role of technology. Advances in automation, robotics, and additive manufacturing have made local production more economically viable. Smart factories equipped with cutting-edge technologies are allowing companies to achieve high productivity, even in regions where labour costs remain higher. The combination of efficiency and sustainability is proving irresistible for many businesses.

Challenges of Local Sourcing

Despite the clear advantages, the shift to local sourcing will not be without its challenges. 

Many regional suppliers lack the scale or expertise needed for large-scale production, requiring businesses to invest heavily in developing local supply networks. Transitioning operations closer to home also demands significant spending on infrastructure, training, and fostering supplier relationships. It’s a process that will take time, careful planning, and resources.

And for certain categories of spend, there is no realistic alternative to sourcing from a global market. The debate here is for those occasions when alternatives are credible.

Even so, the long-term benefits outweigh the initial hurdles. Local sourcing not only aligns with evolving consumer expectations but also supports circular economy principles like recycling, reuse, and waste reduction. Regional supply chains are better suited to these practices, further minimising environmental impact and promoting resource efficiency.

Conclusion

The dominance of low-cost country sourcing may have lasted decades, but its limitations have become impossible to ignore. In its place, local sourcing is emerging as a more resilient, sustainable, and efficient alternative. While the transition will require effort and investment, businesses that embrace this shift will be better equipped to navigate the complexities of a rapidly changing world.

Local sourcing isn’t just a passing trend. It’s a necessity for companies looking to build a sustainable future and meet the demands of modern consumers.