Universal Supply Chain Misconceptions or “Global Sourcing Lies” Jason Busch - February 26, 2015 10:05 AM | Categories: Analysis, Sourcing, Supply Chain | Tags: L1, Sourcing and Categories In a recent Sourcing Journal Online article, Sourcing is Hard, Mike Todaro, managing director of the Americas Apparel Producers' Network, quotes Barbara Zeins, an industry expert that published a short list of “9 Big FAT Garment Lies,” which we might as well call “Global Sourcing Lies,” more generally. Her list of supply chain lies, which I’ll re-quote here, is nearly universal to all industries: Vendors are substitutable There is no cost in setting up a new vendor Costs are linear, increasing in direct proportion to quantity produced Last years performance is a good prediction of next year’s People are a variable cost — in downturns, lay them off Customization is always expensive All costs are either fixed or variable As long as you are competitively priced you will survive The only way to lower product costs is cheaper labor or materials Another way of looking at this list is as a checklist for global sourcing and category managers to have to answer to when they’re involved in a sourcing event or supply chain design effort – or even steady-state supplier management. Perhaps in certain markets, supplies really are substitutable. But we all know the true cost of switching suppliers and developing new ones across direct spend efforts – as well as how supplier development efforts can often yield exceptional results in new ideas and additional collaborative ways to take out cost. Related ArticlesSupply Risk Management 2015 (Part 3): Seizing Leadership and Learning From ExampleSupply Risk Management 2015 (Part 2): Best PracticesWhat Re-establishing Diplomatic Relationships With Cuba Means For the Supply Chain Ebola and the Potential Supply Chain Impact – What is Prudent for Procurement? Discuss this: Cancel reply Your email address will not be published. Required fields are marked *Comment Name * Email * Website Notify me of follow-up comments by email. Notify me of new posts by email.