Industry Perspective: Global Sourcing in the Current Landscape

By Mitchell Rona, Executive Vice President, SIGMA

The current climate is defined by uncertainty. Our turbulent political situation makes the prospect of global sourcing especially daunting, and the recent tariffs have further complicated the landscape. Many companies have come to rely totally on global sourcing and are importing iron components and other materials, exclusively from China. With the recent tariffs targeting goods from China, companies may be facing significant cost increases, and for this reason, should be looking to diversify their supply chains with some urgency.

While “re-shoring” is the buzzword of the moment, the reality is that there are simply not enough domestic producers of iron components to meet the demand at any price, particularly in the short term. Because the primary target of anti-import sentiment and policy seems to be China, prudent supply chain professionals are diversifying their sourcing and approaching providers in India.

Entering the Indian market is challenging. Creating an infrastructure for sourcing, engineering, manufacturing, and trade there requires a sizable commitment of time and money, and this is compounded by the difficulty of transacting business in a developing country. Opening a new supply chain in a new country may not be the right move; choosing an established operator is often a more cost effective and strategic option.

SIGMA cultivated a strong presence in India 33 years ago, and continues to have “boots on the ground” there to ensure that our quality standards are upheld, and US business protocols are followed. SIGMA eliminates the need to open a new supply chain in a new country. Rather than requiring customers to find and develop their own relationships, SIGMA has a turnkey operation, enabling us to deliver quality components with minimal risk and hassle.

This in-country presence mitigates risk and protects customers from many of the problems they may encounter when sourcing globally. While it is clear that challenges can always arise with this type of enterprise, SIGMA’s well-established infrastructure enables us to address issues efficiently and productively.

With the industry–and the world–in its current state of flux, it is unquestionably strategic to broaden supplier bases, both domestic and global. SIGMA will continue to operate in China and India, as well as domestically, maintaining optimal supply chain efficiency for our customers. What may start off as a prudent and defensive move for a segment of a business could wind up saving significant costs–and protecting the business as a whole.