The International Sourcing Challenge

The international environment is one of increased competition in the face of decreasing profitability.  These days it is too often characterized by constantly rising costs coupled with increasingly complex operational processes.

Many companies now operate on a global basis with organizations comprised of many small to mid-sized operating units, affiliates or joint venture partners.  Each unit contributes a stream of revenue, but requires constant oversight to insure continuous productivity.  Complicating the support process is remote geography, frequent employee rotation, high expatriate staffing costs, expensive transportation costs, and multiple procedural constraints applied by foreign governments and partners.

In the battle to control costs, many companies attempt to source a multitude of maintenance and operating supplies and services using their own resources.  For corporate service groups to effectively supply multiple remote operating end users requires coordinated global procurement offices located in the major centers of industry.  Establishing, operating and staffing foreign offices adds significant cost layer to any procurement process.  For example, to export a single product from one country and import it to another, dozens of different standards, including a multitude of safety, material handling and customs regulations may apply.

Moreover, to insure the lowest product cost and best availability, it takes a network of local and global suppliers and a streamlined order process capable of sourcing the thousands of products, produced by hundreds of vendors, operating in scores of worldwide locations.  Developing and maintaining an effective global sourcing database is a daunting task for both scattered procurement staffs and centralized corporate service organizations.  A typical buyer could easily be consumed for hours with one low value, low priority transaction, taking it from user requisition, part identification and quotation, to purchase and delivery.