Global Sourcing, also called low-cost country sourcing is the strategic decision to expand your supplier base to include manufacturers located in countries with lower wages. Typically, these suppliers are based in South-East and South Asia, such as China, India, South-Korea, and Vietnam.
Although the decision to source from these countries is often based on cost reduction considerations, the capabilities of these suppliers should not be underestimated. Regularly, their facilities, technology capacity, knowledge and resources matches, or even outperforms your local manufacturing base.
A misconception is that domestic sourcing reduces your risk and is more socially desirable. On many occasions, your local suppliers subcontract large amounts of your order to a low-cost country and are making substantial profits while you are still exposed to quality and schedule problems.
Direct low-cost country sourcing lets you reap the cost benefits, while managing the supply risks directly and at the source. However, finding the best partner from those thousands of over-promising suppliers is a daunting task. Language and time differences, distance, different ways of conducting business and so on make this process complex and diffuse.
With more than ten years’ experience in successful low-cost country sourcing, Rob Martens Consultancy & Training can assist your organization with the development and implementation of an end-to-end global sourcing process. Furthermore, we can support you with your:
- international tenders or Requests for Proposal (RFP),
- vetting and qualifying suppliers,
- bid evaluation,
- expediting and shipment.
Understanding both benefits and risks of low-cost country sourcing is important. Rob Martens Consultancy & Training can provide training to your employees to embed the global sourcing process into your standard way of working and support your strategy development process.
Examples of projects where we successfully implemented global sourcing for clients in the United States, Canada, and Europe are:
- pressure vessels,
- valves, fitting and flanges,
- skids and modules,
- protective clothing,
- consumer electronics
We have also successfully set up International Procurement Offices (IPO) in China and India.