How to write a sourcing business case
State the buying objective, compare credible alternatives and separate verified evidence from assumptions. Request a capped pilot budget with named owners, acceptance criteria and stop conditions. Make full-order approval depend on the pilot results and an updated cost and cash plan. Cambridge China Bridge can coordinate the China-side evidence.
Define the objective and the decision requested
Open with the business problem: an unreliable supply, an unsuitable specification, excessive delivered cost or a product customers have asked for. State the intended users, destination market, required specification and how success will be measured against the current arrangement. Attach demand evidence such as purchasing history, customer commitments or a documented operational need.
Write the approval request explicitly: permission to investigate, spend on a pilot or place a production order. Name the budget holder, project owner and people signing off quality, finance and product suitability. State what this approval authorises and what must return for a later decision. Use the first-order checklist for execution tasks.
Compare alternatives on the same basis
Include keeping the current arrangement, buying from a UK stockist, importing directly and using a sourcing partner where relevant. Consider changing the specification or deferring the purchase if that addresses the need. Compare each option against the same product brief, delivery destination and demand assumptions. Explain why an option was rejected rather than leaving it out.
Compare delivered cost per usable unit, cash committed, internal workload, supply reliability and recovery options if the goods fail. Attach a dated comparison showing quote inclusions and exclusions. Use Understanding your landed price for the cost build and Do you need a sourcing agent? for the route comparison.
Turn evidence gaps into assigned work
Label each important assertion as verified, supplier-stated or assumed. Give the supporting document, its date and the exact product it covers. For every gap, record the action needed, who owns it, when it must be resolved and which decision it blocks. A supplier promise should remain visible as a promise until checked.
Distinguish gaps that the pilot is intended to resolve from gaps that must close before pilot spending. Follow How to verify a product test report when assessing supplied reports. OPSS guidance states that responsibility for product safety continues after a product is placed on the market. Assign an owner for complaints and safety follow-up in the case.
| Assertion | Evidence to obtain | Decision affected |
|---|---|---|
| The proposed product meets the brief | Recorded sample assessment against the approved specification | Pilot acceptance |
| The factory can repeat the result | Production-process evidence and pilot inspection findings | Full-order approval |
| The saving survives delivery | Comparable delivered quotes with exclusions identified | Commercial approval |
| Demand supports the commitment | Purchasing history or documented customer demand | Order size and stock exposure |
Cap the pilot budget and explain the learning
Build the pilot budget from written quotes for samples, tooling, goods, testing, inspection, freight, clearance, delivery and internal work. Identify exclusions and give any contingency a stated purpose. Separate money spent from money committed, refundable amounts from amounts at risk, and cash timing from expected unit cost. Ask finance to review the assumptions.
Set a spending ceiling and name who can release each commitment. Describe what the pilot will test, the acceptance method and the evidence it will produce. Include receipt and use in the UK where relevant, rather than relying only on a factory sample. State what happens if it fails, who pays for corrective work and when further spending stops.
Make the full order a separate decision
Before the pilot starts, agree the conditions for proceeding: accepted pilot results, closed evidence gaps, a confirmed specification, an updated delivered-cost and cash plan, credible demand, agreed inspection and payment arrangements, and named sign-offs. A successful sample does not establish repeat-production capability. State which findings would require another trial or a revised business case.
Return with the actual pilot cost, defects, delivery performance and unresolved issues beside the original assumptions. Present a recommendation to proceed, revise, pause or stop. Set a separate full-order spending limit and approval record. Reopen approval if the supplier, specification, terms or economics change materially; pilot approval should not automatically release the full order.
Frequently asked questions
What should a sourcing business case include?
Include the buying objective, alternatives, comparable costs, evidence gaps, named owners, a capped pilot request and explicit conditions for full-order approval.
Can I get approval before choosing a factory?
Yes. Request approval for investigation or a defined pilot, state the unresolved supplier questions and reserve production-order approval until the relevant evidence is available.
How do I justify a sourcing pilot budget?
Tie each cost to evidence the pilot must produce. Use written quotes, identify exclusions, explain the money at risk and set a ceiling beyond which spending needs fresh approval.
When should a pilot become a full order?
When the agreed acceptance conditions are met, evidence gaps are closed and the updated cost, cash and demand case still works. Record separate approval for the full commitment.