A Guide to Global Sourcing

Abstract

A growing number of companies are purchasing materials and services from a worldwide arena to obtain the right product at the right price at the right time. Here's how to capture the benefits of global sourcing while minimizing costs and risks.

International Purchasing: Benefits, Requirements, and Challenges

“…Access to lower priced goods Top management support D i verse political env i r o n m e n t s Access to higher quality goods D eveloping communication skills D i verse business pra c t i c e s Access to wo rldwide technology E s t a blishing long-term relationships Nationalistic attitudes/behav i o r Better delivery perform a n c e K n owledge of exchange ra t e s Culture/language diffe r e n c e s Better customer serv i c e Understanding global opport u n i t i e s Volatile exchange ra t e s Help meet count ert rade oblig a t i o n s K n owledge of foreign business pra c t i c e s Logistics support Help develop a foreign presence Foreign supplier cert i f i c a t i o n JIT sourcing requirements Imp r oved competit i ve posit i o n Obtaining ex p e rt assistance Finding qualified sources Increased number of suppliers Planning for global sourcing Duty/customs regulations Table I ing as (1) top management support, (2) development of clear goals, (3) comparison of total costs, (4) establishment of trust and respect, (5) use of information technologies that enhance control, and (6) risk management. 12 Arnold's research focuses on the linkage between international sourcing and competitive strategy, and emphasizes the need to internationalize sourcing activities while integrating international sourcing into a strategic approach to worldwide resource management. 13 Carter and Narasimhan also stress that international sourcing is a critical component of corporate strategy.…”

Supplier safety assessment in the food supply chain and the role of standards

“…The pressures of globalisation emphasise the need for businesses to overcome cost pressures and improve effi ciency throughout their supply chains. Cost reduction is the most quoted benefi t of global sourcing (Fagan, 1991;Kohn, 1993;Rajagopal and Bernard, 1993). However, there are many other benefi ts that can be attained through global sourcing including access to new markets, higher quality goods, access to worldwide technology, better delivery service and better customer service (Birou and Fawcett, 1993;Scully and Fawcett, 1994).…”

Offshore Behavior of Service Firms: Policy Implications for Firms and Nations

“…Cost advantages can for example be realized through less-restrictive work rules (e.g. regarding wages and dismissal), lower land & facility costs, cheaper raw materials, intermediate parts and components as well as low technology costs (Cho, 1988;Fagan, 1991;Weidenbaum, 2005). Examples of other motives for offshoring, apart from cost savings and economies of scales, are for example improving quality of services produced and accessing certain skills or markets as reasons for offshoring (UNCTAD, 2004).…”