Tuesday, August 16, 2022

7 Steps to Implementing a Successful Global Sourcing Strategy

Creating and implementing an effective global sourcing strategy can seem like a daunting task, especially if you’re just getting started in the business world or you’re unfamiliar with the process of ordering overseas.Global sourcing companies, however, can help ease the burden by taking on your biggest challenges and providing the necessary expertise to get you started on your way to sourcing from around the world successfully.

What is Strategic Sourcing?

Strategic Sourcing is a procurement process that creates efficiency across all activities within the procurement function.

Done correctly, Strategic Sourcing enables businesses to align with the organization’s business strategy, reduce purchasing costs and improve customer service levels.

It is recognized as the new operating model for both internal and external buyers and sellers because it strengthens relationships by forming partnerships with suppliers that focus on shared goals.

A successful sourcing strategy must be founded on four core principles:

  • Collaboration
  • Planning
  • Change management and
  • Partnering.

These four principles are tied together into a continuous process of continuous improvement that begins from your vision of success, flows through information gathering and assessment of key performance indicators (KPIs), alignment with strategies throughout the organization through strategic sourcing councils in conjunction with best practices.

To help you understand how to implement this type of strategy into your business model, we’ve put together this helpful guide on how to implement a successful global sourcing strategy at your company.

Step 1: Profile The Category

Global sourcing services and commodity traders provide an invaluable service, whether you’re interested in outsourcing the production of products and services or buying specific products globally.

Regardless of what your end goal is, it’s crucial that you identify which category or commodity you want to source from other countries.

The first step in implementing any global sourcing strategy is to profile the category or commodity that your business wants to purchase from a foreign country.

Step 2: Supply Market Analysis

Understanding your buyer power and category critically position the sourcing strategy by performing market analysis.

If your brand doesn’t have much of it, it may be worth your while to find suppliers closer to home and limit the number of vendors you work with.

But if you have some buyer power, expanding beyond the market in which you operate is likely worth considering—particularly if your supply-chain costs are high or you want to reach new markets.

Step 3: Establish a Strategic Sourcing Strategy

Once you’ve identified your top priorities and objectives, it’s time to set up your strategic sourcing strategy.

You need to decide which countries you want products from and how much you’re willing to spend on them.

It’s also important to determine which companies will work best for certain types of products or services.

In other words, there are companies that specialize in sourcing technology and medical devices, while others focus more on apparel.

Step 4: Choosing The Strategic Sourcing Process

Choosing The Right Global Strategic Sourcing Company At [Company Name] we believe in a global supply chain strategy that is not only appropriate for our product and operations but also reflects our commitment to socially responsible practices.

To make sure we’re living up to those standards, we use an aggressive yet methodical approach:

We find sourcing companies in the USA (like [Name of Company]!) that are dedicated to being environmentally conscious and ethically sound.

Step 5: Agree with and choose your suppliers

Before you can set up your transactions, you’ll need to choose who your suppliers will be. Depending on what it is that you’re looking for, there are many sourcing companies in the USA that can help.

These companies make business connections throughout many countries and will understand your needs and preferences better than anyone else.

Make sure that whatever company you go with provides at least 20 years of experience in global business relations.

A good international sourcing agency will know exactly how to implement all steps required for a successful transaction.

Step 6: Optimize Your Cost Structure

After deciding which products to import, it’s time to decide how you’ll go about importing them. This is where knowing your cost structure—your fixed and variable costs—can make all of the difference.

Step 7: Implementation and Integration

On-Site Visits: The last step in our global sourcing strategy is implementation and integration. Once you’ve found and hired an outsourcing company that can meet your needs, it’s time to get them on-site!

This is when you travel overseas for face-to-face meetings with suppliers and your partners in other countries.

On these trips, your team will work closely with foreign counterparts to make sure they understand your brand, help resolve issues before they arise, and establish a relationship of trust.

Final wrap up

If you’re looking for a more cost-effective, efficient way to manufacture your products, then it’s time you consider global sourcing.

Global sourcing is exactly what it sounds like: employing companies around the world to provide all of your goods and services in bulk, at once.

The process has become simpler over time and many sourcing companies have sprung up over recent years, making it even easier for businesses of all sizes to benefit from global supply chains.

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