Choosing an overseas supplier involves several key steps: (1) Research and shortlisting – Use international trade databases, industry networks, or consultants to find reputable suppliers. (2) Evaluate capabilities – Assess each supplier’s production capacity, quality certifications (e.g., ISO 9001), and track record. (3) Request quotes and samples – Compare pricing, but also request product samples to evaluate quality firsthand. (4) Audit and verify – Whenever possible, conduct a factory audit or have a third-party inspection firm verify the supplier’s facilities and compliance with labor and safety standards. (5) Start small and build – Begin with a trial order to test reliability. Additionally, consider the supplier’s communication responsiveness and financial stability. GP Consulting often assists clients by vetting potential suppliers on these criteria, including on-site evaluations to ensure a good match.

These terms all relate to where a company sources or manufactures its products:

• Offshoring means relocating a business process or sourcing from a supplier in a distant country, often chosen for low labor costs or large-scale capabilities (for example, a U.S. company manufacturing in China).
• Nearshoring refers to moving production or sourcing to a country closer to your home market (e.g., a U.S. company nearshoring to Mexico), aiming to reduce transit time and improve collaboration by being in a similar time zone or region.
• Reshoring (or onshoring) is bringing production back to your home country after having previously offshored it. This can improve control and reduce lead times, but often at higher production costs.
  In practice, many firms use a mix – keeping some manufacturing offshore for cost, while nearshoring or reshoring certain products that require agility or have strategic importance.

Relying on one supplier (single-sourcing) can be risky; if that supplier faces issues (factory fire, bankruptcy, export restriction, etc.), your supply can be cut off. To mitigate this:

• Qualify multiple suppliers for critical materials (dual or multi-sourcing) in different geographic regions. This way, an issue in one region doesn’t stop your supply chain entirely.
• Maintain safety stock of key components to buy time to switch if a supplier fails to deliver.
• Create a strong supplier relationship with open communication so you get early warnings of any trouble. You might even help a key supplier improve their resilience (for example, supporting them to develop their own contingency plans).
• Contractual agreements can include clauses that prioritize your orders or require prompt notification of any disruptions.
• Regularly review supplier risk (financial health, capacity utilization, etc.). If one supplier starts showing red flags, proactively develop alternatives.
  By diversifying your supply base or at least having a backup plan, you ensure that a single point of failure is eliminated.