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Global Sourcing Strategies Explained

Global sourcing involves obtaining goods and services from various countries to enhance business competitiveness. It includes multiple levels of outsourcing, from domestic purchases to globally coordinated strategies, and offers benefits such as cost savings and access to new markets. However, challenges like legal issues and cultural barriers must be managed for successful implementation.

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5 views8 pages

Global Sourcing Strategies Explained

Global sourcing involves obtaining goods and services from various countries to enhance business competitiveness. It includes multiple levels of outsourcing, from domestic purchases to globally coordinated strategies, and offers benefits such as cost savings and access to new markets. However, challenges like legal issues and cultural barriers must be managed for successful implementation.

Uploaded by

bapugowda c m
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd

World Wide Sourcing – Global sourcing.

Module-3
Global sourcing

• Global sourcing is the process of obtaining goods and services from around the
world to meet the needs of a business.
• This can range from sourcing raw materials, to outsourcing production, to finding
new suppliers or distributors.
• It’s a way for companies to take advantage of different countries’ resources and
capabilities to create a competitive advantage.
• Example: IT Gadgets, Machine Tools etc.
Levels of Global outsourcing

• Level 1: Domestic purchases only.


• Level 2: International purchases made on an as-needed basis.
• Level 3: Sourcing strategy that includes global purchasing.
• Level 4: Centrally-coordinated purchasing across global locations.
• Level 5: Global coordination and integration with other functional groups.
Benefits of Global outsourcing

• Cost Savings
• Access to New Markets and Suppliers
• Opportunities for Innovation
• Evaluating Your Company’s Capabilities
• Establishing Relationships with Suppliers
• Developing a Sourcing Strategy
• Managing Logistics and Transportation
• Risk Management
• Monitoring and Evaluating Performance
Challenges of Global outsourcing

• Legal and Regulatory Issues


• Currency and Exchange Rate Fluctuations
• Political and Economic Instability
• Language and Cultural Barriers
Steps to a Successful global sourcing

• Step1 – Define the spend category. ...


• Step2 – Supply Market Research. ...
• Step3 – Create a sourcing strategy. ...
• Step4 – Choose potential vendors. ...
• Step5 – Selecting a vendor and negotiating terms. ...
• Step6 – Execute & integrate. ...
• Step7 – Benchmark and track results.
Its Implementation

• To effectively implement global sourcing in procurement and supply


chain management, companies must consider factors such as supplier
selection, quality control, logistics, regulatory compliance, and
effective communication to ensure the smooth flow of materials and
services across borders while maintaining cost.
Supply Chain Network Distribution

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