• Many companies sourcing globally underestimate the cost of quality failures, compliance and supply-chain complexity. One survey found that while transportation and customs costs were regularly measured, compliance, quality and out-of-stock costs were “harder to quantify” in global sourcing decisions. 
• A research project introduced a “Total Cost of Sourcing” model for global factories – explicitly including product cost, quality assurance cost, social-compliance cost, and switching cost – to capture landed cost plus risk.
• In the practical language of sourcing/leaders: this means that even if a supplier offers a lower unit price, if lead time is longer, quality risk is higher, or compliance monitoring is weak, the true landed cost may exceed alternatives.

• A brand’s weakest supplier can create the greatest risk: “Your brand is only as good as your weakest supplier… Pulling a product off the market and compensating those impacted … can cost millions of dollars.”

• Literature on product recalls emphasises that delays or failures in addressing defects significantly damage firm reputation and increase cost.

• For sourcing leadership this means: define acceptable major‐defect levels (e.g., AQL), treat critical defect levels as zero tolerance, and ensure suppliers commit to those standards + allow audit/inspection verification.

Sourcing from distant or complex geographies increases exposure to delays, disruptions, and inventory risk. A study found that increased delivery delays for foreign inputs caused output loss and price increases – indicating lead‐time risk is real.

Global sourcing managers cite longer lead times, political and logistic uncertainties among top risks.

In operational terms: sourcing teams assess how responsive suppliers are to urgent orders, how fast tooling changes or corrective actions can be implemented, and whether lead‐time buffer and quality-risk mitigation are built in.

• Brand risk and recall cost: A recall can cost tens of millions. For example, one article states: “77 % of food, beverage and consumer‐product companies that experience a recall … cost can be as much as US$30 million per recall.” Supply & Demand Chain Executive

• Complexity of global supply chain: Sourcing farther afield may reduce unit cost but adds layers of risk – quality control, compliance, logistics, currency, transparency. One article notes the hurdles: “All of the hurdles add cost or increase risk or both.” Strategy+business+1

• Quantifiable vs hidden cost: While logistics and duty are relatively visible cost items, quality, compliance, defect‐costs and lost customer trust are often hidden yet material

Statements from Sourcing Leaders & Global Publications;

• “Product recalls are becoming a daily occurrence … 39 % of respondents said the cost to rectify one product recall ranged from US$10 million to US$49.99 million in the U.S. alone.”
  Source: SupplyChainBrain article, September 6 2024. Supply Chain Brain
  Context: Emphasizes how significant recall cost has become in the sourcing/quality decision.

• “Costing on average US$10 million, product recalls are understandably any company’s worst nightmare … almost 50% of brands are still unable to execute product recalls within hours.”
  Speaker: Simon Ellis, Practice Director, Supply Chain Strategies for IDC Manufacturing Insights. Source: RedPrairie Corp study via SDCExec, June 15 2012. Supply & Demand Chain Executive
  Context: Draws attention to traceability, speed of response, supplier visibility as part of the sourcing/quality trade-off.

• “Risk and resilience in consumer-goods supply chains … disruptions lasting a month or longer now occur every 3.7 years, on average, with a cumulative cost to consumer-goods companies of one-third a year’s earnings every decade.”
  Source: McKinsey & Company article, January 20 2022. McKinsey & Company
  Context: Quantifies the financial impact of supply-chain disruptions, relevant to sourcing decisions about lead time, location, risk.

• “Risk is now front and center in every sourcing decision and in the management of every complex supply chain.”
  Source: Proxima Group Global Sourcing Risk Index 2025. McKinsey & Company+1
  Context: Speaks to senior-level mindset: sourcing decisions aren’t just about cost, but risk management.

• “The philosophy that guides your network planning decision-making is to minimize total landed costs subject to meeting defined customer service goals.”
  Source: Material Handling & Logistics USA article. Supply & Demand Chain Executive
  Context: Supports your “true landed cost” concept (unit cost + logistics + duties + risk).

• “The entire end-to-end process must be strategically planned and systematically managed with an emphasis on mitigating any risk from suppliers.”
  Source: Quality Assurance Magazine article. Focal Point -
  Context: Emphasizes supplier risk, quality, visibility — ties into lead-time, defect-tolerance, sourcing country choice.

• “5 Critical Questions CEOs Should Ask for Supply Chain Risk Management … Q1. Do you know the cost of supply-chain disruption?”
  Source: Source Intelligence blog, November 24 2020. Source Intelligence Blog
  Context: High-level executive viewpoint: sourcing decisions are strategic, crossing cost, risk, agility.

• “When product recalls happen, firms not only have to incur additional logistics costs but also suffer from a damaged reputation.”
  Source: Research paper “Product Sourcing and Distribution Strategies under Supply Disruption and Recall Risks”. ResearchGate
  Context: Academic support for your point about defect/risk cost beyond direct manufacturing cost.

• “Failures in the supply chain need to be addressed to mitigate risk … companies must remain vigilant to risks throughout their supply chains and regularly review their product recall insurance.”
  Speaker: Ian Harrison, Partner for Product Recall at McGill & Partners. Source: Insurance Day article, January 7 2025. Insurance Day
  Context: Focuses on supply-chain complexity, traceability, financial exposure in sourcing decisions.

• “Companies use MIT research to identify and respond to supply chain risks … ‘We are not focusing on the state of the supply chain right now, but what may happen six weeks from now…’”
  Speaker: David Simchi‑Levi, Professor at MIT Schwarzman College of Computing. Source: MIT article, June 15 2022. cee.mit.edu
  Context: Emphasises forward-looking risk and agility, which sourcing/quality executives must incorporate.