1. What is global sourcing?
Global sourcing is essentially when a company looks abroad to manufacture or purchase goods or services. It means taking advantage of global efficiencies not found domestically.
2. What are the advantages of global sourcing?
There are many advantages to global sourcing, including:
- Lower manufacturing costs
- A broader range of suppliers
- Access to improved skills and resources
- The chance to learn global business skills
- The ability to create a more efficient supply chain
- Gaining a competitive edge over domestic competitors
3. How big does a company have to be to benefit from global sourcing?
Size is not really an issue – it’s more about the type of product being manufactured and the level of precision required. It’s also about assembly and packaging needs.
4. How do increased labour and material costs impact global sourcing?
Costs are forever going up, particularly with major economies like China and the US. Flexibility and the ability to adapt supply chains are essential, which is where global sourcing companies like Darian can be a lifeline. We can help you with a range of issues around labour and material costs as well as recommend suppliers from our trusted network.
5. What are the problems related to global sourcing?
As in any industry, global sourcing has its challenges. These can include issues like:
- Cultural differences
- Language barriers
- Distance/transportation issues
- Climate/time differences
We can work alongside your business to understand the complexities of global sourcing, and how to overcome any obstacles. We can also help you build solid relationships with overseas suppliers that last.
6. What other issues can arise with global sourcing?
A particular one is communication. Often things can get ‘lost in translation’ leading to delays and confusion. Sending documents using the postal service or a courier is also often time consuming and can lead to further confusion or delays and losses. It’s important to bear in mind that global sourcing does not necessarily need to replace domestic sources completely; it’s simply a tool to gain a competitive advantage by creating high quality products at lower cost.
7. How can global sourcing be successful?
We’ve put together the top 5 tips to help make your first global sourcing foray successful. Again, Darian has a wealth of experience in all of these points and can offer advice tailored to you.
- Select a country with low labour costs and good quality control
- If possible, choose a country with a similar language and customs
- Consider how you will access the country should you or your employees need to visit. What are the visa requirements for example and are there direct flights?
- Make sure you understand local rules and laws
- Source to a country where you can trust the people you’re working with
8. How might Brexit affect global supply chains?
At the time of writing there is still much uncertainty and a flexible way of working is essential. Tariffs are likely to be introduced and any new trade deals may mean that the UK needs to look further afield beyond its European neighbours. Currency fluctuations are also pretty much guaranteed before things become more settled.
9. What is the difference between a tender and a contract?
A tender is a formal invitation to trade under the terms of an offer and the documents associated with it. Generally speaking, a contract is a legally binding agreement between parties, where an offer has been formally accepted.
10. What is a competitive tender?
This is where a company decides who the best provider is having completed a shortlist. The tender itself must lay out the price, terms and specification of the work to be undertaken. All tenders must be returned before a specified date and time.
Let Darian help your business grow
With over 30 years’ experience, Darian has worked with numerous technology and manufacturing companies to streamline their supply chains and reduce costs. To discuss your unique requirements, contact us today on +44 (0)1858 433096 or use our contact page and a member of our team will be pleased to assist.