Rightsourcing: A Better Procurement Model for Manufacturers

The design engineering and manufacturing community is currently enmeshed in an ideological debate over sourcing and procurement. There's vigorous — and at times emotional — argument surrounding strategies for insourcing, outsourcing, near sourcing or keeping it in-house. The argument really shouldn’t focus on the fervent and at times politically-tinged abstractions of what flag flies over the factory, but rather what’s best for your business.

Getting the best product for the lowest price regardless of where the supplier is located is what I call “rightsourcing.”

While we're all sensitive to the wrenching changes that globalization has brought to the North American manufacturing sector, there's no opportunity to roll back the clocks to 1973. Hundreds of industrial segments from shoes and textiles, to shipbuilding to steel and lighting and on to telecommunications and medical devices have scaled up here, matured and then rotated out in place of a new and sometimes better technology.

The rising economies of Asia, Latin America and Eastern Europe won't be going away anytime soon. If you consider only Asia, there are more than two billion people under the age of 25 living, working and consuming products there. Their productive capacity, energy and skills create an opportunity to procure technically sound raw materials, components, sub-assemblies and finished products at attractive prices. The growth in these geographic areas and the emergence of a robust middle class also offers you the chance to sell your products around the world.

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