Today the competition between business enterprises is no longer limited to within a nation or a specific global territory but more widespread with a global backdrop. Free movement of factors of production like raw materials, technology and trained human resource have enabled business houses and manufacturers to procure and utilize the best quality resource at economic rates. Global sourcing is aimed at gaining competitive advantage for sellers and producers.
There is no limitation to the various factors that a manufacturer might procure from different markets across the world. Globalization is essentially a process where both buyers and sellers are able to interact on a much extensive or global scale for achieving their respective objectives. For sellers this objective is to address unexplored markets, while for buyers it is an opportunity for procuring the best materials at cheapest rates. It is interesting to note that a single entity could be a buyer and seller at the same time. For instance, when an industrialist is looking for raw materials or skilled manpower, he is in essence a buyer looking for best quality materials at affordable and reasonable rates. When this industrialist looks for selling his factory output to consumers he becomes a seller.
Consultant and Facilitator
Though awareness among manufacturers has increased by several times in the last ten years, there are still areas that require the intervention of professionals. These professionals usually operate through offices located in prime destinations across the continents. A trans-world presence forms the basic criterion for a global sourcing facilitator. This facilitator not only functions as a procurement agent but also as a consultant. In this age of specialization it is essential to avail the services of a dependable and efficient global procurement company.
Significance of global sourcing
For any business to sustain and grow in this intensely competitive environment, it is essential to operate on thin margins of profitability and high levels of competition. The only way to achieve this is to offer superior quality goods and service at a payable price. For this it is imperative to locate resource areas that are abundant in any of the factors; materials, technology, and skilled manpower. Though all of these might be obtained when the entire world is a level playing field, it is necessary to identify these specific areas of abundance. The responsibility falls on the producer of a product or service to identify these areas.
At the same time it is equally important to locate markets for selling these goods or services. Care needs to be taken that end-user prices are within reach thereby allowing greater market coverage. Here it is to be noted that procuring more than one factor needs to be considered, while for selling only customer preference and price are the considerations. In a market driven economy where price is determined by the interplay of demand and supply, it is difficult to play around with it. However, costs could be brought down by effective global sourcing processes involving trained professionals.