For a number of different reasons, a lot of companies are thinking about buying products from international sources. That’s where global sourcing comes in. Companies everywhere are dealing with unexpectedly high costs of materials and labor, while the U.S. dollar continues to decline and the rising prices of fuel.

But not only that some companies are experiencing quality issues that you can read all about in today’s news. When there are concerns about the quality it ultimately affects the choices of consumers.

The executives of these companies have to be concerned with the overall quality of their products and their brand name, but also they have to risk being linked to a more prominent brand—Made in China.

During the time when China is the most significant source of imports specifically for the United States, companies are accessing their use of China bases suppliers. Although China’s government is trying to improve its brand image as much as possible by actually enforcing quality standards.

However, their efforts may not be enough to keep buyers from thinking twice about their global sourcing options. It’s true that procurement and international sourcing have high advantages however, they also have risks.

The Advantages Of Global Sourcing

A lot of companies are making decisions when it comes to procurement based solely on unit cost. The rise of connective technologies, capital, and having well-educated workers has made it so that you can have the whole world compete for the chance to sell to your business.

And within this competition, there is the ability to reduce costs, such as labor costs. A lot of companies utilize global sources by procuring goods for other reasons, which include the following:

# Access to new research, specialized intellectual capital, and design.

# New technology and capacity are available. Most companies source overseas due to the fact that domestic suppliers don’t have the capacity and don’t make investments to stay competitive.

# Plans to service or sell locally. Sometimes companies will source locally to reduce the barrier to local market entry. Or the company customers have changed manufacturing processes to that specific country and now want to be serviced locally instead.

#  Great quality, a lot of companies like the quality of international source products when compared to U.S. products. This is because supplier investment in technology as well as capacity to end up attracting global business.

Is Global Sourcing Worth It?

Global sourcing is an innovative way to drive efficiency and help companies gain access to new markets. However, this strategy shouldn’t be taken lightly. You should analyze how the role of global sourcing plays in your companies strategic plans. Ask questions before and during the process to help minimize risks.