Exam 13: Global Sourcing

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Global sourcing can provide other benefits as well, including:
-Faster corporate growth. Firms can focus their resources on performing more profitable activities such as R&D or building relationships with customers.
-Access to qualified workers abroad. Countries such as China, India, the Philippines, and Ireland offer abundant pools of educated engineers, managers, and other specialists to help firms achieve their goals.
-Improved productivity and service. Manufacturing productivity and other value-chain activities can be improved by suppliers that specialize in these activities. Global sourcing also enables firms to provide 24/7 coverage of customer service.
-Business process redesign. By reconfiguring their value chains or reengineering business processes, companies can improve their production efficiency and resource utilization.
-Increased speed to market. By shifting software development and editorial work to India and the Philippines, for example, publisher Walters Kluwer now produces a greater variety of books and journals, and publishes them faster.
-Access to new markets. Sourcing provides an entrée to the market, an understanding of customers there, and the means to initiate local marketing activities. Firms also can use global sourcing to serve countries that may be otherwise closed due to protectionism.
-Technological flexibility. Leveraging independent suppliers abroad provides firms the flexibility to quickly change sources of supply, employing whichever suppliers offer the most advanced technologies.
-Improved agility by shedding unnecessary overhead. Unburdened by bureaucracy and administrative overhead, companies can be more responsive to opportunities and adapt more easily to evolving threats, such as new competitors.