Global Sourcing
Global sourcing and global procurement is a procurement strategy or in part of a strategic procurement management and examined in contrast to local sourcing international procurement activities. Global sourcing is to be understood not only the cross-border procurement, but as a total world -oriented procurement strategy.
Objectives and tasks
A major objective of the Global Sourcing is the sourcing side support operational and strategic tasks within the company ( Monczka and Trent 1991). Access to low-cost sources of supply was next technology acquisition and product line diversification, the most widely recognized advantage of global sourcing. Meanwhile, global sourcing provides a quite significant competitive factor for companies regardless of their size is, which is defined primarily on price and quality ( Scully and Fawcett 1994). Particularly in the context of projects for procurement optimization and purchasing optimization to be achieved through global sourcing savings effects for the respective company. Within the global procurement takes the procurement in low-wage countries has a special position, since there are often high cost savings can be realized ( Krokowski 2007).
Benefits and Challenges
While global sourcing can bring significant advantages, the international acquisition also poses dangers. The geographical distances, This would reduce the personal interaction and the increased demands on logistics, enterprises face challenges. To what extent can a company use the potential of global sourcing, ie depends on its ability (capacity) to meet these challenges.
- Due to globalization, more and comprehensive information and easier access to international procurement markets
- Utilization of economy, growth and inflation differentials
- Reduction of dependencies
- Terms of resources that are not available in their own country or very expensive
- Benefits through specializations of individual regions or providers
- Creation of new markets
- Cost and performance pressure on domestic suppliers
- Cheap purchase prices can frustrate due to transport costs, exchange rate fluctuations, tariffs and other trade barriers
- Logistics concepts such as just- in-time or just- in-sequence are more difficult to achieve
- Risks of political instability in the country of purchase
- Occurrence cultural communication problems
- Often long delivery times
- Currency risks
- Loss of know -how
- Where appropriate, uncertain legal situations
Trends in Global Sourcing
With the gained in the last decades of experience in global sourcing show for the future similar trends as before in the area of advanced purchasing. Maximum potential future costs can be realized only through interdisciplinary collaboration, for example, by purchasing and development.
Will gain in importance, among others, the following topics:
- Integrated sourcing
- Design to Localize
- Development Partnerships
- Risk Management
In recent times, the weights have shifted more towards " Local Sourcing for Local Sales." National small units abroad by local companies are replacing the concept of global sourcing and global processing in many other production and distribution facilities. Where to take place on-site production or sales, will also be buying more and more. A triggering moment, the euro crisis, as this decrease the sales opportunities in Europe. In particular, the engineering its revenue shifts to South America, Asia and the neighboring countries.