International Business: The New Realities, 5th Edition

Global Sourcing Strategies and Supply-Chain Management

1. 13.6 Understand global sourcing strategies and supply-chain management.

Firms can reduce much of the risk in global sourcing by employing appropriate strategies. Skillful supply-chain management reduces the costs and enhances the advantages available from global sourcing.

Managerial guidelines for global sourcing

• Go offshore for the right reasons. The best rationale is strategic. Most companies cite cost cutting as the main reason for global sourcing. After the first year, however, the amount of money saved tends to decline. Global sourcing provides the means to achieve more beneficial, long-term goals. Management should analyze its value-chain activities and outsource those in which ...