Don?t melt those containers down just yet. Off shore sourcing is a bargain again.

January 15th, 2009

Oil prices on July 11th 2008

Oil prices on July 11th 2008, reached a new record of $147.27 a barrel, some companies were even considering melting down there containers rather than re-shipping them because of the fuel price involved.

This author discussed the thought of sourcing more products locally in my NAFTA and the High Price of Oil on by August 13th 2008 blog post due to the price of fuel making it impractical to source off shore at the time even when companies considered the low cost of international labor. I continue to believe that there are opportunities that many procurement professionals are not aware of within the North American Free Trade zone that can be explored. With that said, there are some common sense practices to sourcing off shore that your procurement knowledge workers should consider and e-procurement solution providers offer if you are using Software as a Service.

1. Verify the name and address of the supplier, the manufacturing address, phone number, fax number, website and email contact address.
2. Refuse to deal with any generic e-mail addresses. Only deal with specific company addresses.
3. Call the supplier at the provided phone number several times from different numbers such as your home and mobile phone numbers and inquire about the company and the contact person.
4. Ask for specific company and personal references in North America.
5. Inform the supplier that your team will be visiting their location for company tour. Pay close attention to their response to this request.
6. When procuring items from new off shore suppliers request a written electronic payment process.
7. After sample evaluation, also request a pre-shipment inspection for new suppliers. This ensures that the products meet minimum quality expectations before the order is accepted.

These steps may sound like basic blocking and tackling, but sometimes skipping the most simple steps in a new engagement process can cost the most down the road.

As always, we look forward to and appreciate your comments

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