According to Wikipedia, Global sourcing is “proactively integrating and coordinating common items….
Today’s post is by Tyler Walther; Account Manager at SafeSourcing. Tyler details important considerations when sourcing with global suppliers.
According to Wikipedia, Global sourcing is “proactively integrating and coordinating common items and materials, processes, designs, technologies, and suppliers across worldwide purchasing, engineering, and operating locations.” Global sourcing offers many benefits, including lower pricing, quicker delivery times and wide-ranging supply groups. Here are a few factors to consider when sourcing globally.
1. Product Quality: The most important aspect to consider is the quality of the product being sourced. If the quality is subpar or not up to standard, the cost is effectively immaterial. It is important that quality and specification standards are defined so that the supplier and buyer understand and are in agreement. If there are issues with the quality of the product, it is much harder to address with a vendor through different cultures, time zones and geographies.
2. Cost: Assuming the lowest cost is the best route is not always correct. There are other aspects to take into consideration such as transportation, customs and duties, brokerage services (both at origin and destination), banking fees, financing and insurance.
3. Logistical Capability: You must be able to receive the products. What type of international transport is available? Is there reliable transportation infrastructure in the country of origin? Weather and seasonal variations should also be taken into consideration. Events such as the tsunami of 2004, earthquakes and hurricanes can have lasting effects on suppliers located in the affected region.
These are a few factors to consider when making global sourcing decisions. Once an informed decision is made, there is opportunity for profitable business in the global market. We enjoy bringing this blog to you every week and hope you find value in it. For more information on how we can help you with your procurement needs or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative. We have an entire customer services team waiting to assist you today.
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