Global sourcing, global procurement, global trade and global market are some of the most common terms that we hear in the field of manufacturing today. Due to modern technology and conducive environment for international transactions, global sourcing has been on a rise ever since. Think about any products, raw materials or industrial domain and you will understand the influence of global sourcing. Converting the entire world into one common marketplace- global sourcing has great scope in the modern times. Global procurement can help you in variety of ways. From reduction in cost to excellent quality material, fully automated processes to good service; it can benefit us in numerous aspects.
In order to reap maximum success in terms of customer satisfaction and cost- effective measures, one must involve professional procurement. After detailed analysis of the global market, professional procurement can offer you best sources from around the world. But, does this mean you must always look out for global sourcing? Isn’t it essential to ask the right questions and analyze the situation before you can draw conclusion about global sourcing?
Contract manufacturing overseas – a part of global sourcing
Contract manufacturing overseas is one element that deals with contacting manufacturers overseas for production as per your given specifications. In-depth analysis of local markets and best assured quality products are some advantages that you can expect. Besides, they have closer proximity to raw materials that can aid in manufacturing. Yet, you should not invest into such procedures, unless you gain help from professional procurement companies. As they know about local policies of the foreign country, it can certainly prove advantageous.
With respect to cost and quality, you may be drawn towards global sourcing. But, let us look into the right questions that you must ask, before deciding a feasible option. You should seek their answers for making the right decision. Global sourcing may make sense for some products, while it may not be the same for some others.
What is the total cost involved?
To answer this question, you must take several factors into consideration. You must analyze – cost of raw materials, taxes, shipping costs, additional charges for local policies, exchange rate. Once you have calculated all these factors with respect to your local market, you can decide if global sourcing will be beneficial.
How much time will it take?
Before making the decision, you must consider lead times involved. What is the duration for analysis, finalization, manufacturing and delivery? It is necessary to consider local factors such as weather, policies, rules and regulations of the overseas country. This makes it essential to contact a procurement company that has experience with the local land.
What are the laws involved?
it is important to look into patents, copyrights and legal regulations. Certain countries have weaker patent laws as compared to your own home country that can benefit in global sourcing.
So make sure you ask these questions and get expert opinion to make the best out of global sourcing!