Global sourcing offers many benefits, such as lower costs, faster turn around time and a larger resource pool.
What does Global sourcing mean?
According to Wikipedia, global sourcing is the practice of sourcing from the global market for goods and services across geopolitical boundaries.
Global sourcing often exploits global efficiencies in the delivery of a product or service. These efficiencies include low cost skilled labor, low cost raw material and other economic factors like tax breaks and low trade tariffs.
The whole point of global sourcing is to find better sources of supply around the world, offering improved quality and lower prices.
Things to consider before making a commitment. Global Sourcing could be tricky. Make sure you and your vendor have an understnading.
Source to a country with low labor costs and good quality control.
Companies typically enjoy a 10-35% cost savings by sourcing however, beware of lower quality products and complaince issue. It might cost you more. Do your homework in advance. Know what pricing you need and the quality, product specifications and timeline that will fit with your overall strategy.
Source to a country where you easily travel to.
Once you enter into a relationship with a supplier thousands of miles away, you will want to visit as often as warranted.
This is a strategic decision. sometimes,time is of the essence.
Beware of Language barriers
You need to have an understanmding of the language and the cultture. It makes the transactions easier.
Source to a country where there are clear laws and structure.
You dont want to lose your investment or have your products stopped due to regulations.
Trust is Key to success. You must trust the people you do business with.
The only way to accomplish your goals is to get to know the person with whom you wish to have a relationship, no matter how much time it takes.