Global Sourcing
Introduction
The goal of this module is to develop the abilities of participants to become more acquainted with the issues and the strategy of global sourcing. This module is supported by a variety of articles on global sourcing, along with some web sites on global business and economics.
Participants will focus on analyzing commodities from foreign countries, and discussing the benefits, risks and challenges of pursuing global sourcing arrangements.
About this Module
This module explores the critical issues involved in making and implementing of domestic and offshore sourcing decisions. Global sourcing is defined as the process of identifying, developing, and utilizing the best source of supply for the enterprise, regardless of location. Worldwide economic, political and social factors combined with accelerated advances in communications technologies have altered the nature of business. The result has been the emergence of strategic global sourcing. It is a key element in organizational planning.
Participants will focus on the analysis, preparation, transition and implementation activities required for firms to succeed; also they will learn how to redesign sourcing for maximum competitive benefit.
Beyond exploration into effective Asian offshore sourcing, the module provides both a framework of essential topics and a set of practical tools for both domestic and global offshore sourcing.
Module Objectives
Upon completion of this module, candidates should be able to:
- Understand major issues of the global sourcing environment, such as barriers and facilitators to global sourcing, with special reference to low-cost country sourcing.
- Conduct a total cost of ownership (TCO) comparison; including pre-transaction, transaction and post-transaction costs; of sourcing an item domestically versus from a low-cost country.
- Identify and discuss some critical business and social issues of sourcing from low-cost countries, including child labour and countertrade.
- Identify important issues in the NAFTA sourcing environment, such as drivers and challenges to sourcing from Mexico and the United States.
- Estimate or project the impact of national politics, currency rates, oil prices, etc. on the viability of NAFTA sourcing.
- Determine the role of trade corridors and inland ports as facilitators to NAFTA trade.
- Discuss the role and function of intermediaries in global sourcing. And, compare the costs and benefits of indirect versus direct dealing in global sourcing.
- Recommend direct or indirect distribution and (if indirect) a type of intermediary to support a specific global sourcing scenario.
- Describe the purpose and characteristics of the Inco terms 2000.
- Recommend when to use various means of payment available to importers/buyers.
- Discuss the impact of currency exchange on global sourcing risk.
- Discuss intellectual property and threats to it, including piracy and counterfeit goods. And, understand other security issues, including hijacking, bottlenecks, and terrorism.
- Identify risks and challenges associated with supply chains and sourcing in China, India, Latin America and Africa.
- Develop a supply chain methodology to support the sourcing of a product from a foreign country.
Module Topics
- Low-cost Country Sourcing
- NAFTA Sourcing and Rules of Origin
- Global Supply Chain Game Intermediaries
- Freight and Payment Terms and Security Issues
- Sourcing Around the World
- Strategic Global Sourcing
Review the complete list of Learning Objectives for this module.
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