The subject of Chapter 10 is global sourcing. As firms’ competition heats up, firms will become more global minded. To be a global firm, management must be able to critically evaluate foreign markets. In the current business environment, firms are beginning to develop global procurement strategies.
Trang 1Purchasing and Supply Chain Management
3rd edition
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Chapter 10:
Global Sourcing
Purchasing and Supply Chain Management, 3rd edition, Copyright 2013, W.
C. Benton Jr., All rights reserved
Trang 2Current Trends
survive
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Trang 3Costs of Global Sourcing
• Costs not directly involved with the product
fees, and others
• Costs not incurred if a domestic source were found
costs, etc.
• Costs common to both global and domestic sourcing
Trang 4Currency Exchange Rates
• Strong dollar: Lower cost of goods
• Weak dollar: Higher cost of goods
• Less risk
• Payment fluctuates with exchange rates
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Trang 5Strategic Considerations of Global Sourcing
against the associated risk
• Exchange rate uncertainties
• Direct costs of importation
• Indirect importation costs
• National interests
• Ethical consequences of “sweat shop” labor
• Hazardous working conditions
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Trang 6Offshore Sourcing Analysis
from global sourcing.
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Trang 7Freight and Duty Costs Estimation Example
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Trang 8Global Provider Opportunism
destroying role in global outsourcing relationships:
• The extent to which the service provider is inclined to deliberately underperform or withhold resources
• The extent to which the service provider is inclined to utilize information gained through its relationship with the customer for its own benefit
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Trang 9Power and Global Sourcing Risks
• Not poaching
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Trang 10Countertrade
payment of a sales transaction
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Trang 11Questions?
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