When should we avoid local procurement?

Local0rocurment is the best option to go for however if the quality is not guaranteed through it we can go for national then international procurement

1. when the technology or resource is not available locally

2. when the local costs of production are high or are rising

3. when there is political instability resulting in inconsistent business policies

4. when local infrastructure is not business friendly

5. when the tax regime is stringent

6. when the local quality is not consistent

7. when the local vendor does not have the muscle to match the fast rising demand

8. when the local vendor has monopoly or high bargaining power

9. when the local vendor does not conform to your business policies

 

I agree with previous answers 

we go for local procurement when ever its possible, a lot of benefits and flexibility gained (logistics and delivery time, payments and cash flow, no warehouses, reserve nor insurance)

we should avoid local procurement only if it didn't fulfill the quality criteria      

Any procurement decision will be based on the following criteria”

·         Cost of the product

·         Product quality

·         Delivery time

·         Payment Terms

 

Cost and quality: These two are major factors in procurement decision assuming other things equal. If the local cost is less and product quality is good, we should go for local procurement.

 

Now-a-days, if the supplier is located even in another country, the supplier can ship the goods via Air and3PL Companies can clear and deliver the goods within shortest possible time. So, distance (for offshore procurement) may not be a factor unless the goods are required immediately.

 

So, we shall avoid local procurement only when the cost is higher or quality is not up the mark or both than the offshore procurement.

 

 

Local procurement generally offers lots of benefits and reduction of risks and shall only be avoided when the quality of products is not guaranteed.

local market is the first and best option to go for , but if the unavailability of product in local market, cost quality,cost efficiency, minimal lead time are not guaranteed through it we can go for national then international procurement.

The procurement (international or national) decision must contain4 terms,

1. The quality

2. The price

3. Delivery time 

4. The payment terms

According to all these we have to take the decision. 

Thanks for your invitation. I agree with Mr. Farooq' Answer. He consider all point for the local procurement avoiding.

We should avoid local procurement when we have seen there is an Intangible risk involved . All aspects are clear that in simple way when we have seen Product quality, Cost of Products , delivery lead time and payments terms are not match with local supplier we refuse or avoid to take local purchase. Some times local influencer also create pressure like political involvement & other bodies are involved then we should avoid local purchase. Finally we should consider the controlling part if control is other hand then you should avoid local purchase. If it is big purchase & volume is high and capacity also involved then we should avoid local purchase.

Thanks for the invitationI don't have any information about the question so I leave the answer to the specialists