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The purpose of this paper is to identify the components required for more robust landed cost models given the now widespread interest in sourcing finished goods, components for assembly, and basic raw materials from global sources. This study also seeks to establish the need for broad‐based participation in operationalizing such models.

Interviews are conducted with several major firms that import a range of merchandise into the USA to develop in‐depth case studies. A taxonomy of variables found in increasingly comprehensive forms of landed cost models is developed from the case studies. These variables are assembled into modules and analyzed with the use of an expert panel consisting of executives responsible for import activities at major firms.

Most major firms are relatively unsophisticated in their approach to making offshore sourcing decisions. Few employ models that are sufficiently detailed and some do not even embrace the basic logistical elements of price, transportation, and inventory. The administrative overhead required for offshoring is seldom considered nor are the potential risks associated with sourcing globally that may result.

The study considered only imports into the USA. Even with a relatively broad range of industries represented and the in‐depth research design, there are very few data points. Hence, this is theory building research upon which a more broad‐based methodology will be found.

With firms of all sizes and industries seeking to employ offshore sources of supply, a rational approach needs to be developed to support such decisions. Historically, such actions were taken on the basis of price alone; however, such an approach is clearly suboptimal. Many firms need to develop the ability to collect the requisite data, allow sufficient time to conduct proper analysis, and establish the cross‐functional mechanism for decision making.

This paper provides a range of modules, the more sophisticated potentially useful for supporting effective offshore sourcing decisions. It also advances the idea that while cost advantages may be present, there may be certain risk factors that obviate offshore sourcing alternatives.

The purpose of this paper is to investigate the issues pertinent to sourcing internationally from low‐cost countries (LCCs) and to understand which issues are associated most strongly with a firm's logistics performance.

Comparative examination of supply sources in developed countries and LCCs is conducted using a paired‐sample setting. Data acquired by a mail survey of US‐based manufacturing firms are analyzed using a canonical correlation analysis (CCA). CCA helps to reveal the structure of relationships within and between a set of sourcing issue variables and a set of the logistics performance variables investigated.

Results indicate that the issues that should be priorities for improvement are: supplier production capability; business culture and practices; and communication infrastructure.

The survey data and analysis focused on US manufacturing firms importing from LCCs. However, there is increasing activity of US retailers importing from LCCs, suggesting a need for a follow‐on study which considers the retailer perspective.

Results not only validate the issues to be considered in sourcing from LCCs, but also provide a direction for logistics managers in allocating an organization's scarce resources to the issues of highest potential for improving logistics performance.

The fast emerging role of LCCs as supply sources of US firms and the cost advantages of sourcing from LCCs are widely recognized. However, challenges associated with sourcing internationally from LCCs and the extent to which they are related to a firm's logistics performance have received limited attention in existing logistics research. This study contributes valuable insights into this area of international sourcing and logistics management.

Any firm participating in external (or inter‐firm) benchmarking anticipates at least two benefits: useful statistics on how it performs relative to the other participating firms; and guidance in identifying promising performance improvement actions. Using data from a five‐year benchmarking program for firms engaged in import operations, this research illustrates how these benefits might be assured. A major recommendation of the research is that, along with formal analysis of quantitative data, the structure of ongoing inter‐firm benchmarking programs must facilitate the firms’ receipt of information that enhances the realization of these benefits. This is likely to improve such programs along the dimensions of data gathering efficiency, data quality, and hence the usefulness of benchmarking to participating firms.