A Look into Four Important and Incongruent Goals of Global Sourcing
Before discussing about the vital and different objectives of a global sourcing initiative, it is important to talk a bit about the concept of global sourcing for those who are new to the model. Then, we will move on to the main topic.
Global sourcing is considered as a winning procurement strategy embraced by most large-scale organizations. Global sourcing or international purchasing can help an organization in many ways. If your local suppliers are not offering standard quality supplies at reasonable prices or want to outsource your manufacturing process to a destination where labor wages are quite low, global sourcing can turn out to be the right option. Global enterprises constantly take note of the emerging countries and plan to spread their business to those destinations. This is also a global sourcing strategy when a company is eager to leverage the competencies of a country’s human resources.
No matter for what purpose you want to go for this effective procurement strategy, when planning a global sourcing initiative, you will be required to keep in mind the following four objectives. These goals are divergent, but the biggest trick is to combine them seamlessly, fulfill them efficiently and make global sourcing a success.
Four chief and contrasting global sourcing objectives
- Some of the most significant reasons behind global sourcing are cost reduction, detection and eradication of inefficiencies and advancement of business procedures. But, this does not mean that once these goals are fulfilled, the benefits of this procurement strategy lose viability. After the accomplishment of the set goals, global sourcing helps to create new competence through change and improvement. The new competency leads to a better and more advanced operational efficiency.
- There is no doubt that the implementation of a global procurement initiative brings changes within the organization. Every organization wants this switch to take place quickly and ensure that it does not affect the business. Quicker the transition, lesser the risks. It gives people less time to react and creates less or zero doubts thereby, reducing risks. Global sourcing helps to achieve this quick transition which is something not supported by traditional outsourcing.
- Global sourcing is beneficial not only for controlling costs, but also for mitigating risks provided adequate attention is given to this aspect. While deciding on the price, you must check whether the sourcing service provider will be able to deliver as per planning and if both the parties will gain from the strategy.
- During the implementation of a global procurement initiative, employees are required to take up vital roles and shoulder significant responsibilities to make sure the implementation is impeccable. This helps the staff to learn new aspects, improve efficiency and get enriched. The knowhow gained by the employees help the organization’s development in the long run.
These are the four main objectives of global sourcing that are disparate. If you want this procurement strategy reap ample benefits for your organization, you should bring these different goals into one line. Then only, global sourcing will prove to be a successful venture for your company.