International sourcing means purchasing from a supplier located in another country. The transaction normally adds customs, international transport, currency conversion and cross-border payment requirements to the ordinary sourcing process.
The operating decision
Define who will export, import, arrange freight, clear customs and carry risk at each point. The contract, purchase order and Incoterm should describe the same operating arrangement.
Evidence to retain
Verify the supplier, country of origin, product classification, required permits, payment instructions and shipping documents before releasing an order or deposit.
| Area | What to record |
|---|---|
| Decision | Define who will export, import, arrange freight, clear customs and carry risk at each point. The contract, purchase order and Incoterm should describe the same operating arrangement. |
| Evidence | Verify the supplier, country of origin, product classification, required permits, payment instructions and shipping documents before releasing an order or deposit. |
| Watch point | International sourcing is not interchangeable with global sourcing. A company can source internationally from one country, while a global strategy deliberately manages several supply markets. |
A common sourcing mistake
International sourcing is not interchangeable with global sourcing. A company can source internationally from one country, while a global strategy deliberately manages several supply markets.
Related definitions: incoterms, supplier verification, payment terms.
