One of the most important economic prerequisites for operating on the market is the efficient procurement of quality goods and services. International orientation is hereby becoming increasingly influential. Due to globalisation the world is to be seen as one single market. The impact of this perspective does not only refer to global sales but to global procurement as well. In terms of an international perspective the term ′Global Sourcing′ has evolved describing the challenging opportunity of supplementing traditional procurement by international complex activities. Worldwide suppliers, worldwide options and the access to global knowledge increase the need for detailed evaluation.
Global sourcing hereby aims at ensuring a competitive advantage in terms of procurement politics. Those politics equally contain chances and risks. A variety of suppliers also means a variety of quality standards. International sources require international logistics. Therefore global sourcing is beyond simple international purchasing and rather a general strategic orientation towards international supply markets.
Consequently, the focus of this term paper is to determine the strategic orientation of procurement politics towards Global Sourcing on the basis of international supply chain management.
Contents
1 Introduction
2 The concept of Global Sourcing
2.1 Definitions
2.2 The Global Sourcing – Portfolio
3 The Organisation of Global Sourcing
3.1 Strategy
4 The impact of Global Sourcing
4.1 Statistic and empiric data
5 Chances and risks of Global Sourcing
5.1 Chances
5.2 Risks
6 Conclusion
Pictures
Picture 1: Four types of sourcing strategies
Picture 2: Strategic and operative tasks of supply management
Picture 3: Organisation of Global Sourcing
Picture 4: Import Allocation
Picture 5: Country Procurement Share
1 Introduction
One of the most important economic prerequisites for operating on the market is the efficient procurement of quality goods and services. International orientation is hereby becoming increasingly influential. Due to globalisation the world is to be seen as one single market. The impact of this perspective does not only refer to global sales but to global procurement as well. In terms of an international perspective the term 'Global Sourcing' has evolved describing the challenging opportunity of supplementing traditional procurement by international complex activities. Worldwide suppliers, worldwide options and the access to global knowledge increase the need for detailed evaluation.
Global sourcing hereby aims at ensuring a competitive advantage in terms of procurement politics. Those politics equally contain chances and risks. A variety of suppliers also means a variety of quality standards. International sources require international logistics. Therefore global sourcing is beyond simple international purchasing and rather a general strategic orientation towards international supply markets.
Consequently, the focus of this term paper is to determine the strategic orientation of procurement politics towards Global Sourcing on the basis of international supply chain management.
2 The concept of Global Sourcing
2.1 Definitions
Global Sourcing commonly refers to sourcing outside a company's traditional domestic markets with strategic orientation. A company's desire to source globally may be motivated by two different strategic imperatives:
a) international purchasing as globalisation of supply management
b) strategic orientation in order to ensure a competitive advantage by
the economic evaluation of international markets
According to the above mentioned terms it is obvious that global sourcing is not international procurement. Thinking and acting globally is a logical extension of just simply purchasing goods and services. Global Sourcing looks at the best source of products to supply global operations. Life-cycle decisions are based on purchase price, lead-time delivery, technology, flexibility in response to schedule changes, and economic and political stability[1].
Due to that Global Sourcing has evolved to a significant strategic key in supply chain management.
2.2 The Global Sourcing – Portfolio
Due to the complexity of the strategic requirements Global Sourcing is strongly connected to the general policy of the enterprise as well as subordinate divisions like production and marketing. Due to that Global Sourcing has impact on the vertical as well as the horizontal structure of the company as shown in picture 1.
illustration not visible in this excerpt
Picture 1: Four types of sourcing strategies
(Source: following Welge, Martin K.: Globales Management. Erfolgreiche Strategien für den Weltmarkt, Stuttgart 1990, p. 58)
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[1] Welge, Martin K.: Globales Management. Erfolgreiche Strategien für den Weltmarkt, Stuttgart 1990, p. 58
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