Global sourcing and global supply management are both very important concepts in global supply chain management. Global sourcing, on the one hand, is the process of procurement or obtaining much cheaper goods and services from foreign to domestic markets. Global supply management, on the other hand, can fit a narrative of implementation, maintenance, and control of strategic processes of buying, including outsourcing from low-cost countries. Many companies and international organizations today conform to such strategies to reduce total costs, gain a competitive edge over their competitors in the same marketplace, increased their organization’s profitability, meeting and exceeding shareholders’ annual returns and more importantly steadily optimizing customer’s satisfaction. In today’s international business environment, the world is seen as a global village where goods and services flow across geographical boundaries and territories for the common purpose of providing high-quality supplies to domestic and foreign markets at a lower price to satisfy today’s ever increasing demand for quality products and services. Here are some major forces that have made global sourcing and global supply management a reality for many contemporary businesses and industries. Some of these factors can be traced back from historical factors, technological changes, free trade agreements between countries, an increase in global competition and low cost of sourcing to mention a few. Historical
Global sourcing is an important aspect to a global business, as this can significantly decrease cost as well as have access to resources, technology and expertise overseas while increasing efficiency. However, the reliance on the supplier and the quality control of the outsourcing partner is potentially a threat to the businesses reputation and ability to succeed.
Supply Chain Management: An International Journal, Volume 7, Number 5, 2002, pp. 271 – 282;
The reason of the creating competitive pressure to firms is that which from the enhancing the quality but decreasing the price synchronously. The key of success is that the firms and organizations which treat “Global Sourcing” as a weapon fighting with its competitors.
Inspired by my multi-cultural identity and my family’s global manufacturing and printing company, my desire to pursue a career in global supply chain management continues to shape my professional life. While completing degree, I worked full time at MazGraphic Digital Company, Unified Grocers and Aerojet Rocketdyne. My involvement with these companies led me to become increasingly detail-oriented, heightened my ability to multitask and learn about different supply chain strategy. After graduating college, I joined the Munchkin Inc. team as a supply chain
Ferreira, J., & Prokopets, L. (2009). Does offshoring still make sense? Supply Chain Management Review, 13(1), 20-n/a. Retrieved from http://search.proquest.com/docview/221135949?accountid=12085
According to our textbook, global sourcing is the practice of purchasing goods and services from the around the world wherever it is least costly (Pg 82). A strategic alliance is a partnership between two entities in which they both share their
In today’s business world, production cost was an increasing concern for companies working to stay competitive in the global marketplace. The top management must search for a global solution to drive down costs and reduce difficult activities associate with inventory management and production management. Global sourcing aimed to exploit global efficiencies in the delivery of services and goods across geopolitical boundaries, including low cost skilled labor, low cost raw materials, tax benefits, and price breaks. Whelan Pharmaceutical was the best example to illustrate how the company chose the best manufacturing site for global sourcing from different perspectives.
The process of globalization has numerous significant effects on countries, organizations, and individuals. These effects can be observed in the quality of products, in their prices, but also in their availability. Because of globalization, numerous companies prefer to expand their business on international level. Some of them outsource some of their processes and activities to cheaper destinations that allow them to reduce their investments.
As companies increase their global presence through the outsourcing of manufacturing activities, the question of Who is responsible for ensuring the supply
The shifts in the jeans manufacturer Levi Strauss’s global strategy could vividly demonstrate how global sourcing strategy works and affect its supply chain. At first, the company was created in the USA. As it developed and became a global company, they began to employ workers all over the world. However, in face of fierce competition, Levi Strauss started to shift its operation to lower-cost countries in the late 1980s. By the year 2003, Levi Strauss closed the last four plants in North American and ‘has become an entirely offshore producer’ (Dicken 2011 p.318). The German fashion company Hugo Boss also provides similar example. In face of high production cost, namely high labor cost in domestic market, more and more fashion retailers choose to outsource their production. Moreover, some fast
We are all aware about the importance of supply, manufacturing and operations chain for any business. It becomes even more important if we are crossing the borders and entering international marketplaces as we are
Strategies through achieving a competitive advantage resulted in the existence of the terms `Globalisation` and supply chain management (SCM). Because in today`s emerging and industrialized environment companies seek to achieve competitive advantages and are no longer competing with their own expertise but with the talent in their entire global supply chain. [1]
Many complex and more diverse decisions confront supply chain managers on a regular basis: what would be more efficient to manufacture in-house or to outsource; what new channels to implement that it would benefit their customers and suppliers, or how all new technologies, platforms, and practices have to be aligned to enable real-time supply chains. Current information technology reduced outsourcing transaction costs drastically, enabled companies to an increased supervision and control over offsite work, and outsourcing services can deliver faster and more convenient, but technology alone is not the solution. If a company decides to embrace changes in business processes and business culture, those changes can support a long way toward delivering a better product for less money. Complex sphere of activities in many countries is not relevant anymore because a massive number of activities outsourced became commonplace, a new normal.
Global companies source their raw materials and outsource manufacturing of their products to many countries to take advantage of lower costs or high quality production, and/or lower costs of
Those organizations that have already moved toward outsourcing suggest that there are still many ways in which to ensure that the organization retains control over these critical areas. It is true that some still believe that there are no outsource vendors that are truly global in terms of their inventory management and logistics capabilities - that