Near-sourcing is a type of lean manufacturing that involves obtaining raw materials from nearby sources to reduce waste and expenses. This can provide a competitive advantage by eliminating transportation and import costs.
The connection between lean manufacturing and neighbor sourcing comes from the fact that neighbor sourcing is an aspect of lean manufacturing implementation. This link between lean manufacturing and near-sourcing can be better understood by knowing the meaning of the two terms. Lean manufacturing refers to a production method specifically geared towards maximizing profit through the reduction of the production process by eliminating wasteful practices. Near-sourcing is a type of manufacturing practice that involves a purposeful decision by a company to obtain the raw materials needed for production and other ancillary production needs only from sources located close to the manufacturing or production facility. production. In this sense, the connection between lean manufacturing and near-sourcing is how near-sourcing enables the company to achieve its goal of reducing all forms of waste.
In fact, the relationship between lean manufacturing and near-sourcing can be seen in how the decision to source only raw materials from nearby locations can be converted by the company into a form of competitive advantage. An illustration of this concept can be seen in the case of a company that manufactures prefabricated houses and is looking to implement lean manufacturing into their manufacturing processes. Part of such a process would be to obtain items such as materials used for the manufacturing process only from local sources that are within a set radius. The goal would be to reduce the expenses that would have been incurred in the process of acquiring materials from international or distant sources.
One of the expenses that would be eliminated, which further shows the link between lean manufacturing and near-sourcing, is the reduced cost for transporting materials from their international or distant locations to the factory. Also eliminated by the near-sourcing application is the removal of all duties that would have been paid as a result of importing the materials from international locations. For example, assuming the company imports materials such as latex and some types of fixtures from another country, it could eliminate the customs duties associated with importing the materials, as well as the cost of transportation and other necessary logistics such as handling costs by local purchase. The local sourcing process would also mean that there would be less expense in loading and unloading materials on different means of transport as the material would only make a short trip to the factory.
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