Reaping the benefits of global sourcing

With the explosion of globalisation, it’s hard for businesses large and small to ignore the allure of sourcing from around the world. Whether you source for a niche provider or a major global player, the beginning steps to expanding supply chain operations are the same 

Some countries are just better at some things than yours. Tapping into another country’s products allows you to improve the quality of your own products.

If your company doesn’t have the capacity or infrastructure to manufacture as it would want to, they can only outsource it to a company that has the capabilities to.

Businesses might outsource internationally because they might feel that domestic suppliers are lacking or not making the necessary investments to stay competitive with cost savings.

When sourcing internationally, it pays to be aware and anticipate common challenges. Here are some of the common pitfalls to avoid when considering low-cost country sourcing. We help you in every step of the way.

Understand the local tariff and tax structures in countries involved. Depending on the low-cost country’s tax structure you may or may not be saving on costs prove to be a net gain depending on the level of export taxation in the source country and tariff levels in the importing country.

Political unrest, both internal and external, can halt supply lines. Consider events like protests, riots, pirate activity, airport closures and more. Political instability can cause interruptions to your supply chain. With our local presence and experience we constantly monitor the risk analysis for you.

While shipping is a fairly economical method, the overall cost analysis of low-cost country sourcing and domestic sourcing is critical to the overall cost equation. We help and advise businesses on how to lower costs like freights, duties or labour and work with most cost effective logistic companies and modes of transport.

Don’t forget to factor in lead time when considering sourcing from global suppliers. The effect of longer lead times will affect how much you order and how much safety stock you’ll hold in your inventory.

Honestly evaluate the extent to how you will monitor, audit and build your supplier relationship. It’s crucial to know what you are looking for not only in a product or material, but also in a supplier. Locating a high-quality, strategic business partner when researching and identifying appropriate suppliers is of crucial importance. 

Dependent on the economy and resources of the country you are sourcing products or materials in, the quality standards in that region may be very different from your home country. With global sourcing, it is much more difficult to keep an eye on a supplier’s quality management practices, work conditions and perceptions of quality.