Global sourcing is the practice of getting goods or services on a domestic or an international level across geopolitical boundaries. It often aims to exploit global efficiencies in the delivery of a product or service. To survive the competition both strategically and financially, modern-day corporations must manage complexities, improve their operative efficiencies and reduce costs. In this context, sourcing is an attractive proposition. It is commonly found that global sourcing initiatives and programs form an integral part of the strategic sourcing plan and procurement strategy of many multinational companies. However, the processes involving sourcing are way too complex, time-consuming and expensive. If not planned and executed properly, practicing such processes 'in-house' are likely to overshoot the budget of the company.
As the most rational alternative, many businesses have resorted to global sourcing companies. Apart from the promise of providing the clients with customized solutions for every single problem in-hand, such qualified strategic companies provide the businesses with myriad benefits. Let us take a look at them one by one:
- Reliability
When we are talking about sourcing on a global scale, finding the right supplier is the first, and often most-difficult part of the process. Getting feedbacks about a vendor from across the seven seas seems very difficult if not impossible. Established sourcing companies use their existing relationships and previous experiences to ease out the process and therefore can help the corporations to find a reliable supplier.
- Low cost labor Sourcing companies 'outsource' the labor-intensive processes to developing nations, resulting in access to cheap labor. Thus the cost of production is much lower resulting in reasonably cheap products or services.
- Access to raw materials across boundaries
If a corporation in a particular country uses raw materials that is limited in that country, the business might lower its supply risk by sourcing the raw materials internationally, from countries where the resource is abundant in supply. This requires excellent relationships and apt clearances (and the cost associated with it) on the international boundaries. These dynamics are taken care by the third party vendors who act as one stop shops.
- Quality of materials
Okay, so you got access to the raw materials. Now let's look at the next level of difficulty - the quality of the raw materials. Even when a corporation looks at cost-cutting, there has to be a minimum adherence to the quality of the raw materials that are required by the company in order to come up with reasonable good products. The sourcing companies ensure that their clients get their desired quality of raw materials as per the agreement with the client. This makes the companies and their staff worry-free and the corporations can focus on other important aspects of their business.
- Scalability and Resource Skills
While building a new product or upgrading an existing one, local or global sourcing is a great idea. The business can assemble a dynamic team of experienced professionals depending on the magnitude of the solution required. Once the project is completed, the team can be dispersed. This way the cost of the company is also reduced as it does not have to recruit and maintain a group of professionals even when the events are not happening.
Thus, it can be concluded that firms that leverage these alternative operating models and global capabilities can be much more focused on value-added activities and other strategic objectives, thus positioning themselves to receive a greater return on their assets.
The Miami based sourcing company, http://ShopUST.com offers 30 years of experience in global sourcing. With relationships in more than 20 countries, ShopUST can offer reliable, low cost and effective sourcing services. Representatives are standing by to assist you and all quotes are free. Call us NOW at 800-878-1660!
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