Over the past several years there have been three major developments in the evolution of global sourcing. These are that more companies are pursuing a global supply base along with increasing the number of countries viewed as a sourcing base and an increase in the quantity and variety of available products.
Some of the factors that are leading companies to look at alternate supply sources (Globalization) include the education level of workers available in other countries, the size of the domestic and import markets and market liberalization.
This market liberalization, led by China’s admission into the World Trade Organization has assured commitments to reduce high tariffs. There is also an abundance of low-wage labour available. China’s average hourly manufacturing wage is 60 cents an hour with an able work force of 941 million.
Companies looking at these alternate supply sources are then faced with several challenges in global sourcing among them is the requirement to identify and establish new supplier relationships.
Some of these new supply sources will have less advanced Information technology systems and an inability to share information easily.
For those companies embarking on alternate supply sources they must perform more research and due diligence on those overseas suppliers and must also look at incorporating local business culture into their negotiation strategy.
There are many different approaches to global sourcing such as establishing an international Supply Management Office, the setting up of local joint ventures where they work with an in-country enterprise to establish a presence. Some companies will look at finding a Trading Agent to act as a sourcing broker.
Today, search firms especially those with a Strategic Procurement and Supply Chain focus are familiar with companies that utilize these approaches and can provide those well qualified candidates no matter which approach a company has in place.
Article Source: EzineArticles.com@@AMAZON_GEN_WIDGET@@.