In research, the terms global sourcing is often interchanged with the term international purchasing are terms that have meanings that are very different. While many practitioners and researchers frequently interchange the terms, there are some basic differences between the terms. Global sourcing involves coordinating and integrating suppliers, designs, technologies, processes, and materials across operating locations, design, and purchasing all around the world. Conversely, International purchasing involves a commercial transaction between a supplier and a purchaser that are located in different nations.
The strategies associated with global business will continually receive increasing attention because businesses are continually searching for new and better ways to compete in the marketplace. An approach that is advanced to supply management and global sourcing that involves coordinating and integrating suppliers, technologies, processes, and common materials purchasing across operation locations all over the world is one area where global sourcing can relocate to practice from concept. Because many businesses don’t have global sourcing strategies that are well developed in place, the opportunity for improvement in this area haven’t yet come to fruition but are still very attractive. It is important that the emphasis be shifted from an emphasis of cost reduction that is narrow to a coordinated sourcing and globally integrated strategies that will improve a businesses’ ability to be competitive.
There is research that has determined that many managers who are in executive positions, especially at large manufacturing businesses that are based in the United States, clearly want to enjoy the advantages that can be had from sourcing approaches that are more advanced. However, the reality is that most businesses currently don’t have the willingness, capability, or understanding to maintain operations that levels that are so demanding. This can result in very serious consequences when businesses have competitors that really know how to coordinate and integrate their activities all around the world. The businesses that produce and sell their products all around the world shouldn’t consider global sourcing as a strategy that is just now emerging.
This research has also identified key features that characterize the businesses that are leading in global sourcing. These characteristics will assist executives to understand what an effective global business looks like and compare their practices and progress against the best practices of global sourcing. The participants in this research were mainly large multinational businesses that were based in North America that didn’t involve services but involved manufacturing instead.
Based on the location and of the businesses that participated in this research, there isn’t any basis to the claim that the results of this research should include all businesses, especially businesses that are located in the U.S. or those that are in the medium to small category.
Click here for more information about global sourcing and clothing manufacturers. Author: James Keyes