Global Sourcing: Introduction, Benefits and Challenges

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GLOBAL SOURCING Presented by James Diaz

OUTLINE OF TOPICS

Global Sourcing - Introduction Incorporating Global Sourcing in Supply Chain - Parameters Benefits of Global Sourcing Major Challenges Contact Us

WHAT WE'LL DISCUSS

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The term global sourcing is not very new, particularly, for present-

GLOBAL SOURCING INTRODUCTION EXPLOITING GLOBAL EFFICIENCIES

day supply chain professionals due to its massive influence on businesses and supply chains.

Global sourcing is a sourcing strategy where businesses and organizations opt to source goods and services from the global market across geopolitical boundaries to gain competitive advantage.

The competitive advantage could be in terms of: higher quality better prices advanced technology cheaper labor etc.

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GLOBAL SOURCING

The important thing about outsourcing or global sourcing is that it becomes a very powerful tool to leverage talent, improve productivity and reduce work cycles.

AZIM PREMJI CHAIRMAN OF WIPRO LIMITED

INCORPORATING GLOBAL SOURCING IN SUPPLY CHAIN PARAMETERS

Global sourcing may not work for every supply chain because of how complex it is. Therefore, to gauge your preparedness for global sourcing, you need to look into some parameters, some of which include:

Working capital structure Lead time Skill set and knowledge of your staff Flexibility of your supply chain Depending on how you finance your operations, whether you depend too much on debt financing or not, lead time of your globally sources materials, skills and knowledge of your staff in respect with international trade and how flexible is your supply chain, you will be able to decde whether global sourcing will work for your supply chain or not.

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Reduced operational costs

BENEFITS OF GLOBAL SOURCING

Access to global suppliers ensures higher competition and reduction in price.

Higher product quality Global sourcing helps you gain access to better technology which helps you manufacture products of higher quality and gain competitive advantage over your competitors.

Access to materials and skills that are locally unavailable Production is made easier and cheaper through the global sourcing concept.

To effectively deliver the five rights of your customers (delivering at the right price, quality, quantity, time, and place) and achieve your bottom line, you have to keep pace with the market dynamics and global sourcing is one of the proven ways of doing so.

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CHALLENGES OF GLOBAL SOURCING HOW IT CAN NEGATIVELY IMPACT YOUR BOTTOM LINE

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Major Challenges QUALITY CONTROL

FOREIGN EXCHANGE FLUCTUATIONS

COMPLIANCE TO EXISTING LAWS & REGULATIONS

COMMUNICATION BARRIERS

The quality of your product is affected to a

The value of the world currencies keeps on

It is important to deal with suppliers who

Time differences and language barriers can

large extent by the quality of your raw materials. When dealing with global suppliers, it becomes a

fluctuating due to changes in the economic condition.It could happen that you have entered into a

comply with laid down laws and at a time when procuring entities worldwide are striving to embrace green

make communication a real challenge in global sourcing.

challenge evaluating their performance, especially quality, until

contract at one price and by the time delivery is to happen,

procurement, you also need to ensure you are sourcing from suppliers

the materials are

prices have fluctuated

who use green

already delivered to your premises.

drastically leading to immense loss.

production processes.

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It is no doubt that the challenges of global sourcing are existent and can mess your business big time if you overlook them. Fortunately, they are quite manageable if proper measures are put in place. You have no reason not to source globally since every endeavor has got its own challenges, you only need to take precautionary measures.

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THANK YOU

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CONTACT US WEBSITE https://www.procurementfreelancers.com/

EMAIL diazjames124@gmail.com

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