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Industries · Toolkit

Sourcing, trade and supply risk

What companies buy, where they make it and what can go wrong: spend analysis and should-cost, safety stock and the cost of holding it, landed cost worked end to end, tariffs and rules of origin with real current examples, the maths of nearshoring and "China plus one", and how to price supply risk in a case.

106 min7 lessonsFacts checked against sources on
Start lesson 1: Procurement and sourcing: where the money goes Skip to the practice: Should a Malaysian furniture maker build a plant in Mexico?

Key takeaways

  • For most companies that make or sell goods, bought-in materials and services are the largest cost.
  • Stock on a shelf is cash that is not earning anything. Each unit held costs a share of its value every year.
  • The price on the supplier's invoice is only the start. Landed cost is the full cost of getting goods to your door.
  • A tariff is a tax on imports, paid by the importer at the border. What a product pays depends on three things.
  • Moving production is an investment. It pays when the yearly saving in landed cost and risk covers the one-off cost of moving within a sensible time.
By the end you will be able to
  • Find where a company spends its money, build a should-cost for a part and judge single against dual sourcing with numbers
  • Size safety stock for a service level and show how lead time and the bullwhip effect drive inventory
  • Work landed cost end to end, including the customs value rule, duty, financing and currency
  • Explain tariffs, trade agreements and rules of origin, and read a real tariff line
  • Do the maths of moving production: cost per unit, one-off cost, payback, lead time and tariff risk
  • Price supply risk as probability times impact and choose between buffers, second sources and hedges

Lessons

1

Procurement and sourcing: where the money goes

Spend analysis, should-cost, supplier power and single against dual sourcing, each with numbers you can recompute.

16 min
2

Inventory and the cost of holding it

What holding stock really costs, and how to size safety stock for a service level. Also why lead time matters so much, and the bullwhip effect in numbers.

16 min
3

Landed cost, worked end to end

From the supplier's price to the cost on the shelf: freight, insurance, the customs value rule, duty, clearance, financing and currency. Includes a real EU tariff line.

15 min
4

Tariffs, trade agreements and rules of origin

How tariffs work, and why most-favoured-nation rates are the default. How trade agreements and rules of origin change the rate. And what changed in 2025 and 2026 in the US, EU, India, ASEAN (the Association of Southeast Asian Nations) and the Gulf.

18 min
5

Nearshoring, friend-shoring and "China plus one"

What each term means, what the trade data show, and real moves in India, Vietnam, Mexico and the Gulf. Then the maths of moving production: cost per unit, one-off cost, payback, lead time and tariff risk.

17 min
6

Supplier concentration and resilience

How to measure dependence on one supplier or country, and price risk as probability times impact. Then how to choose between buffers, second sources, contracts and hedges, with rare earths as the real example.

13 min
7

Using this in a case

What to ask, calculate and say when a case involves buying, making or moving goods. Includes a full mini case: should a furniture maker in Malaysia open a plant in Mexico?

11 min

Worked cases in this module

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Key terms

Start with lesson 1

7 lessons, about 106 minutes in all. Each one builds on the one before.

Start lesson 1: Procurement and sourcing: where the money goes Skip to the practice: Should a Malaysian furniture maker build a plant in Mexico?