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Global sourcing
Published in Thomas E. Johnsen, Mickey Howard, Joe Miemczyk, Purchasing and Supply Chain Management, 2018
Thomas E. Johnsen, Mickey Howard, Joe Miemczyk
Global sourcing is the practice of contracting out activities or functions to specialized suppliers around the world. The most basic meaning of the term sourcing is ‘product searching’ and is often associated with the prefix ‘global’, ‘international’ or ‘strategic’. Whereas Chapter 5 examined outsourcing decision models by evaluating the so-called ‘make-or-buy’ decision, here we focus on the particular challenges of sourcing to, and from, global supply markets, especially low cost-countries (LCCs) such as China, which over the past 30 years have emerged as major supply markets due to significant cost advantages. In short, because of the effects of globalization, global sourcing has become synonymous with standard practice for many companies, whether seeking to source auto parts, computer components, fashion clothing or relocate call centre services offshore.
Supplier Selection and Order Allocation: Process Performance Index
Published in Hamed Fazlollahtabar, Supply Chain Management Models: Forward, Reverse, Uncertain, and Intelligent, 2018
It is obvious that strategic sourcing and supplier selection topics have been mainly targeted and applied to manufacturing firms producing and marketing products. We suggest that researchers explore the application of strategic sourcing and supplier selection in non-manufacturing settings to determine its applicability and overall value. In addition, little research has been done on measuring purchasing performance. It would be beneficial to explore how purchasing views itself, how it is viewed by top management, how it is viewed by internal (i.e., other functional areas within the firm) and external stakeholders (i.e., suppliers to the firm). Last, as more and more companies around the world participate in global sourcing activities, international studies should be conducted to examine supplier selection strategies and practices across different countries and cultures.
Introduction
Published in Johann Rost, The Insider’s Guide to Outsourcing Risks and Rewards, 2016
Gartner vice president Ian Marriott told the attendees of an IT conference in Barcelona, Spain that not only the United States but many developed counties are affected. According to Marriott, “Global sourcing is becoming a mainstream delivery model. The potential cost advantages are so persuasive that companies that don’t consider it seriously risk doing their shareholders a disservice. Businesses will also be put at risk due to loss of competitive advantage and inability to focus on growth through innovation.”
Mapping research in logistics and supply chain management during COVID-19 pandemic
Published in International Journal of Logistics Research and Applications, 2023
Jairo R. Montoya-Torres, Andrés Muñoz-Villamizar, Christopher Mejia-Argueta
Global supply chains are prone to high levels of uncertainty and instability have given that the order fulfillment process to serve customers is no longer regulated by a single, integrated entity, but by a variety of independent and decentralised companies working together. Theorists have focused on the transaction and production costs for explaining the shifting modes of production. Global sourcing has contributed to increase risks and vulnerabilities in the supply chain (Sheffi 2007). Similarly, companies should possess the capability to navigate volatile markets and respond properly to changes in demand (Sheffi 2020). Indeed, the impact of this globalisation is at least twofold (Kouvelis et al. 2011). Firstly, there appear huge opportunities for cost reduction, planning and access to labour, human talent pools, capital, and markets. Secondly, this rise in the complexity of the supply chain goes way beyond the traditional issues of supply and demand uncertainty. A similar trend is also observed even for domestic, nation-wide supply chain systems where the number of stakeholders has grown considerably during the last decade in most of the countries around the world.
Performance implications of the fit between sourcing configurations and design-manufacturing-service capabilities
Published in International Journal of Logistics Research and Applications, 2023
Yongyi Shou, Chang Wu, Weijiao Wang, Mingu Kang, Young Won Park
Global sourcing has become a critical means for many manufacturing firms to achieve competitive edge because it has prominent advantages over local sourcing (Frear, Metcalf, and Alguire 1992). Specifically, first, lower price and higher quality are considered as the two most important advantages of global sourcing (Golini and Kalchschmidt 2011; Jia et al. 2014). Most manufacturing firms expect to procure high-quality products at low cost thus to maximise cost-effectiveness (i.e. price/quality ratio). Overseas procurement could help firms acquire lower-price and/or higher-quality supplies, particularly for raw materials and standardised components. Second, availability is also a critical factor which encourages firms to sourcing globally since domestic manufacturers may be technologically deficient in certain areas. Through global sourcing, firms can get access to locally unavailable products, technologies, and other scarce resources (Nassimbeni and Sartor 2006; Volberda, Foss, and Lyles 2010). In addition, another motivation of global sourcing is to legitimise or develop a foreign market outlet (Trent and Monczka 2003). Through continuous investment in specific markets, firms can not only purchase products with larger quantities and higher price/quality ratio, but also expand their overseas markets so that their products can be sold worldwide. Overall, global sourcing can help firms get competitive prices, improve product quality and acquire locally unavailable resources, but it may also result in longer lead time, increased transportation costs, severe communication barriers in business process across cultures, and greater risks of supply chain disruption (Francioni and Clark 2020; Golini and Kalchschmidt 2011; Gualandris, Golini, and Kalchschmidt 2014; Kumar 2010).