Global Sourcing In Flux: How To Future-Proof Your Procurement Strategy

06/05/2025

As global tensions escalate from China-US trade friction to shifting tax treaties and supply chain nationalism, procurement leaders are no longer operating in a stable sourcing environment. With governments tightening cross-border rules and ESG expectations becoming deal-breakers, traditional sourcing strategies are fast becoming obsolete.

This article features insights from Giselle Lynn Arellano - Geronimo, Head of Finance, Accounting, and Procurement at Shearwater Health Philippines, to help you navigate this turning point. Whether you're re-evaluating offshoring, exploring nearshoring, or weighing local moves, you'll gain practical decision frameworks, real-world lessons, and a 7-point readiness checklist to future-proof your sourcing model.

Setting the Stage: Why Sourcing Has Become More Complex

Globalization is increasingly blurring interregional business lines, while cross-border rules aim to retain business within local jurisdictions. Striking the right balance between these opposing forces has become critical.

“We opened a new office in India just as new cross-border regulations took effect. Navigating this evolving environment is now critical to protecting returns and ensuring sustainability,” says Geronimo.

Evolving Sourcing Strategies

Procurement in APAC has traditionally welcomed both local and international vendors. However, strict cross-border taxation policies continue to hinder full globalization. While continuous tax treaties offer opportunities, they are often hard to comply with due to multiple non simple documentation requirements.

Offshoring, Onshoring, Nearshoring: Pros & Cons

Each sourcing model comes with its own strategic advantages and risks:

  • Offshoring
    Pros: Cost efficiency, access to global talent, and 24/7 operations.
    Cons: Cultural and communication barriers, geopolitical instability.

  • Onshoring
    Pros: Simpler compliance, better alignment with head office, and a stronger local brand presence.
    Cons: Higher labour costs, limited talent pools, and less global perspective.

  • Nearshoring
    Pros: Cultural similarities, closer time zones, and potential regulatory alignment.
    Cons: Limited cost savings and dependency on regional political and economic stability.

“While offshoring is still our dominant model, regulatory challenges are pulling us closer to onshoring, from a vendor selection perspective” Geronimo notes. “We adapt based on the realities of execution, not just theory.”

What Procurement Leaders Often Miss

When making sourcing decisions, it’s easy to underestimate:

  • Geopolitical risk
  • International tax laws
  • Cultural nuances

These "blind spots" can lead to inflated costs and disrupted operations if not carefully assessed upfront.

The Modern Decision Framework

What should guide sourcing decisions today?

  • Top Priorities: Cost, talent, and innovation.
  • Emerging Drivers: ESG goals are becoming increasingly important and should not be overlooked.
  • Constant Factor: Risk is always present so it's about knowing which ones you’re willing to manage.

Stakeholder Collaboration

Key decision-makers typically include the CPO, Head of Procurement, CFO, and Operations or Production leads. For alignment, it’s important to:

  • Understand each department’s strategic goals.
  • Bring up pros and cons early in the decision-making process.
  • Recognise that industries with heavy manufacturing may face greater scrutiny around environmental and sustainability metrics.

Real-World Learnings

Shearwater continues to outsource but constantly reassesses their sourcing strategies to adapt to shifting regulations and business needs.

Nearshoring often looks ideal on paper, offering proximity and potential cost savings. But in practice, complex regulatory hurdles frequently make onshoring the more viable path.

That said, the talent pool in the Philippines remains a vital part of their operations, providing an ideal balance of expertise, professionalism, and cost-effectiveness.

Best Practices in Sourcing Execution

  • Align with leadership priorities and risk appetite.
  • Account for regulatory and compliance early.
  • Prioritize partnerships with vendors who share your values and ethics.
  • Actively taking advantage of globalization.
  • Embed automation and stay agile to adopt new trends.
  • Document expectations clearly in POs and reinforce them in regular alignment meetings.

7-Point Rapid Sourcing Readiness Checklist

  • Understand your company’s strategy and leadership appetite for globalization.
  • Gather insights from global teams close to operational realities.     
  • Understand geopolitical and tax implications before expansion.
  • Vet vendors for long-term alignment in ethics, values, and sustainability.
  • Conduct a 3-way evaluation; cost, reliability, and relationship potential.
  • Stay open to market trends and feedback to continuously evolve.
  • Remember: business is about people. Strong partnerships are built on trust.

Global sourcing is no longer a cost-only decision but a strategic puzzle. The key is to understand your company's priorities, know the risks, and invest in relationships that scale with you.


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