For all the buyers, purchase managers and sourcing experts, global sourcing is not a new thing. It’s a norm for decades and it has gained more traction in the last decade for the ever-rising pressure on cost optimization. Global sourcing is equivalent to finding the “Global Optima” in a typical “Optimization problem” whereas local sourcing might lead to “Local Optima”. It’ll be always there in the CXO charter till the time the quest for a healthier bottom-line will not take rest! Globalization of the companies has indeed begun primarily due to the quest for a more economical operations. This driving force for globalization has become paramount in different shapes and features. In today’s scenario, not only the cost factor but overall streamlining operations also has shaped up global sourcing. In some cases, globalization gives ways to localization where the main reason for globalization has been for access to better technology or technical know-how which is usually an expensive affair. It’s upstream or reverse globalization but not sustainable for any company for a long term. So, global sourcing primarily drives home the much needed breathing space – more profitable operations – assuming no compromising on the product quality!
Global sourcing has become the only way to keep your company books away from the unnecessary flab – finding the global optima for your profitability curve! All the buyers & sourcing managers of the manufacturing companies, distributors, contractors can not avoid this global optima. They welcome it with open hands but with a parameter trio – QCD – Quality, Cost & Delivery! Global Optima will definitely take care of your “cost” factor but should not factor out “Quality” of the supplies and should not keep you waiting for long to be delivered to satisfy your production line or your customers’! A typical buyer’s KRA includes this QCD trio-factor which can not be ignored while sourcing globally. The buying guidelines may warrant several restrictions, approval and other methodology, but this QCD measure is the only one which encompasses everything in a buying process.
A global sourcing agent, distributor or expert should provide the buyer with this wholesome value proposition formula, not only just helping achieve optimized cost of sourcing but also reduced Cost of Goods Sold (COGS). It’s imperative for the buyer also to fulfill his /her procurement need checked up against this QCD trio factors to get the ideal global optima!
Global Sourcing is slated to rise further as the demand is growing at rocket speed and the new tools and platforms are being introduced for simplifying this global trade by few innovative companies around the globe. It’s the golden time for the buyers, indeed!
Know more about Joy the Author