Supply Chain & InventoryFree worksheetPDF, Excel, Word exportNearshoring ManufacturingMexico

Nearshore Supplier Transition Plan Worksheet

Moving parts to a nearshore supplier is a project with a qualification path, tooling spend and a savings case, not a single purchase order change. This worksheet is the program tracker that purchasing, quality and finance can all update in one place.

Download:

Part number	Current supplier	Nearshore supplier	Annual volume	Current landed cost per unit	New landed cost per unit	One-time tooling and qualification	Annual saving	Payback	Stage	Target release
							$21,600	10 months
							-$15,000	0 months
							$4,800	62.5 months
							$10,400	4 months

Total annual saving

$21,800

Total one-time cost

$52,500

Program payback on net savings

28.9 months

Parts in the program

Savings can be negative on some lines, which is acceptable if the program is justified by lead time, tariff exposure or risk. Landed cost should include freight, duty, inventory carrying cost and expected expedites. A line with a negative saving shows payback of 0 in this sheet.

Turn the tracker into a live ERP view

Optional: a review of how supplier, cost and approval data could power this view automatically.

Optional. The tool and every export work without this. No spam.

How to use it

Add one row per part. Enter the current landed cost, the quoted nearshore landed cost and the annual volume. Add the one-time cost for tooling, samples, first article inspection and PPAP. Update the stage as the supplier progresses, and export the table for the weekly sourcing review.

Use landed cost, not unit price, on both sides
Include freight, duty, inventory carrying cost and expedites
Set a target release date linked to the last buy from the old source
Record the stage honestly so slippage shows early

The method behind it

Annual saving is the difference in landed unit cost times annual volume. Payback in months divides the one-time cost by annual saving and multiplies by 12. Lines with a negative saving are shown with zero payback and should be justified by other factors such as lead time reduction, lower safety stock, tariff avoidance or dual sourcing for risk.

Reading the result

The program payback tells finance when the initial investment is recovered across all parts. Look at the stage column too: a program with great savings but most parts still at RFQ has a long path before cash arrives. Sort by due date to see which parts risk running out of stock during the changeover.

Common mistakes

Comparing ex-works nearshore prices with delivered Asian prices, ignoring the inventory freed up by shorter lead times, and not planning the overlap period when both suppliers ship. Another trap is underestimating qualification time for regulated products, where customer approval of a source change can take months.

Frequently Asked Questions

What should be in landed cost?

Include unit price, freight, insurance, duties and fees, brokerage, inventory carrying cost for the lead time, and a reasonable allowance for expedites and quality issues. Use the same basis for both suppliers.

How do I handle customer approval?

For aerospace, medical, automotive and defense customers, a source change usually needs notice or approval. Add that step to the stage and the target date, and do not release the last buy until approval is in hand.

Why does a line show zero payback?

The formula returns zero when the saving is zero or negative, since payback is not meaningful. Review those lines for the strategic reason to proceed, or cancel them.

Can I add dual sourcing?

Yes. Add a row per supplier with the planned volume split, so each line reflects the actual share and cost. This is useful when you keep the Asian source as a secondary supplier.

If item costs, suppliers and approval status live in your ERP, Netray can build this tracker as a live view that updates with purchase and receipt data.

Talk to an Expert Explore More Free Tools

Related Tools

Discrete Manufacturing

More Supply Chain & Inventory tools

See all

Back to All Tools