What is Global Sourcing? Darian Global Sourcing

Global sourcing

Global sourcing is a term used to describe strategic sourcing in today’s global setting. Most companies now include global sourcing as part of their procurement strategy. Global sourcing often aims to exploit global efficiencies in the delivery of a product or service. Common examples of globally-sourced products or services include: labour-intensive manufactured products produced using low-cost labour in India, and IT work performed by low-cost programmers in India and Eastern Europe. Global sourcing also occurs when volume production is no longer efficient in one country and therefore makes sense that it is carried out in a country with larger volume capacity.

The global sourcing of goods and services has advantages and disadvantages that can go beyond low cost. Some advantages of global sourcing, beyond low cost, include: learning how to do business in a potential market, tapping into skills or resources unavailable domestically, developing alternate supplier/vendor sources to stimulate competition, and increasing total supply capacity. Some key disadvantages of global sourcing can include: hidden costs associated with different cultures and time zones, exposure to financial and political risks in countries with (often) emerging economies, increased risk of the loss of intellectual property, and increased monitoring costs relative to domestic supply. For manufactured goods, some key disadvantages include long lead times, the risk of port shutdowns interrupting supply, and the difficulty of monitoring product quality.

As a result some companies give up on the idea before they begin, however that is why Darian has been so widely used over the past few years.With our specialist skills in this area, we are able to guide companies to make the more of the opportunities, whist reducing the risks.