Shorter distance is useful only if the supplier and route perform. Compare a nearby source with the incumbent on the same approved specification.
Practical frameworks are editorial recommendations. All worked examples are hypothetical, not client results. Confirm transaction-specific legal, tax and safety requirements with a qualified professional.
Compare the whole route
Measure factory-to-customer lead time, not distance alone. Include border procedures, component availability and the reliability of local transport connections.
- Map factory, component sources, border crossings, transport legs and receiving inspection. Measure usable delivery time rather than map distance. OECD resilience research cautions against assuming relocation alone removes exposure to disruption or shared dependencies.
Assess operational fit
Check whether nearby suppliers can meet specifications and demand peaks. Proximity does not replace sample testing, capacity checks or clear quality agreements.
- Apply the same sample tests, capacity checks and defect criteria to both suppliers. Verify constrained equipment and subcontractors. Compare delivered cost, including tooling, qualification, freight, duty and inventory; do not compare a factory quote with a delivered quote.
Worked example
Hypothetical pilot: a nearby plant depends on the same overseas component as the incumbent. Transport is shorter, but the shared component can still stop both plants. Qualify an independent component route before treating the new supplier as a resilience improvement.
Pilot before moving volume
Trial a limited product range and compare delivered cost and service. Keep an established source available while the new route proves reliable.
- Agree a limited pilot, acceptance criteria and fallback before moving volume. Measure actual delivery time and defects, then approve or reject the scale-up. Keep the incumbent qualified until the alternative has demonstrated repeatable supply.