I'll be dropping by Eye For Procurement's Low Cost Country Sourcing event in Chicago next week. If the conference is anything like last year's event, it will be well worth the time. At the show, I'm looking forward to catching up with colleagues and friends including Pierre Mitchell and Mickey North Rizza. But more important, I'm hoping to trade thoughts with the global sourcing executives and managers from various industries that are showing up at the event. Specifically, I'm most interested in seeing how companies are responding to the changing tides of global sourcing. If my recent conversations with executives from different industries are any indication, many are seriously reevaluating their approach to global sourcing and looking for new and often creative ways to identify savings (often from better managing non unit/labor cost factors).
What are the types of questions I'm curious to learn more about? These are just a few of the areas on my mind that I'm hunting for opinions on from global sourcing pracititioners:
How much have rising oil prices impacted the total costs of your global sourcing decisions (single digit impact, double digit, etc.)
Have you switched geographies for any categories or products based on changes in the dollar?
What types of price increases have you faced from China in the past year that are non-currency related?
Are many of your current global sourcing efforts being driven by localization?
How are you using technology to improve your savings from global sourcing efforts, reduce supply risk and improve supplier quality/performance?
Has the on-the-ground hiring profile for IPO resources changed at all (e.g., from supplier identification/sourcing to supplier development)?
What type of support / collaboration are you getting from non-procurement resources in the organization? Are you working more closely with operations/supply chain, global trade/customs, or business unit executives?
The above list is just a start. Clearly, the global sourcing world is changing. In fact, I plan to suggest to the conference organizations that they should change the name of the event given the fact that most companies I speak with aren't thinking in terms of "low cost country sourcing" anymore but rather "best cost country" or "most competitive country" sourcing. Clearly, there's much opportunity left to take advantage of different labor rates in developing markets (and even different rates within countries based on geography). But those who are still oriented primarily towards labor-driven unit cost thinking are sacrificing big opportunities -- and in many cases have already opened themselves up to added costs in other areas.
- Jason Busch