Weegy: Global sourcing offers many benefits, including lower costs, faster go-to market time and a broader resource pool. This article provides tips on how to make the most of global sourcing. [ But first, it's important to understand exactly what global sourcing means.
What Is Global Sourcing?
According to Wikipedia, global sourcing is the practice of sourcing from the global market for goods and services across geopolitical boundaries. Global sourcing often aims to exploit 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.
How To Make Global Sourcing Work
Here s a five-point strategy for making your first global sourcing foray successful.
1. Source to a country with low labor costs and good quality control.
Companies typically enjoy a 10-35% cost savings by sourcing.
In the past, China was considered the go-to country for the lowest pricing and acceptable quality. (Be careful here because the transportation cost alone from China to your factory door can jack up the price considerably on your landed price per unit; make sure the price your supplier offers sans transportation costs beats all other competing supplier bids a hundred times over to ensure you end up with the lowest possible price). But now, companies are turning to such destinations as Korea, India and Vietnam for alternative low-cost country suppliers, especially since China is slowly raising its pricing.
The key to global sourcing success lies in you doing your homework in advance. Know what pricing you need and the quality, product specifications and timeline that will fit with your overall strategy.
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