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Global Sourcing : Risks and Costs
Master the complexities to maximize the benefits
By Kim Biggar
Toria / Shutterstock . com
Nowadays , in much of the world , you ’ d have to live a hermit ’ s life to be unaware of the multitude of goods we consume that come from “ elsewhere .” While most people don ’ t spend any time thinking about how those goods came to be in their possession , for supply chain professionals , securing those goods requires a lot of attention .
Sourcing products , materials , parts and services from suppliers around the world is a challenge : it involves significant risk , but also immense potential benefits . Clearly , manufacturers and distributors – as well as consumers – have found the challenge worth accepting ; according to data from Statista , the value of the global outsourcing market grew from US $ 46 billion in 2000 to $ 89 billion in 2015 , with a spike to $ 105 billion in 2014 .
“ It ’ s a big world ,” said Angelo Crupi , a professor at Humber College in Toronto and coordinator of its supply chain management certificate program . “ Going beyond national borders helps companies access cheaper and better – and sometimes unique – services , materials and products .”
Grace Zhang , VP of business development at Strategic Global Sourcing Ltd . ( SGS Sourcing ) in Vancouver , sees global sourcing as “ an investigation business ” that aims to reduce a company ’ s purchasing costs , thereby increasing its competitiveness , and help it attain products that are not available in the local market or not available when required .
Lower-price and better-quality goods certainly have strong appeal , but do the risks associated with global sourcing outweigh those benefits ?
SUPPLY CHAIN CANADA • QUARTER 4 2016 • 11