Is Global Sourcing Dead? Introducing the ‘Distance’ Construct Instead

TPP

I’ve long been an information junkie when it comes to reading up on different tips for global sourcing. Even though I don’t “do” it anymore like I used to – with the stomach scars from eating insects and drinking alcoholic Drano in China (and worse) to show for it – I attempt to stay on top of observations and recommendations from others still engaged with it.

As one example, Adam Brosch, a practitioner from Berlin Packaging, recently shared his thoughts on 6 global sourcing risks and how to mitigate them. His tips are basic but succinct – and would certainly be of use for those getting their feet on the ground globally for the first time (or wanting a quick “brush up” on what to factor into account). Essentially, he argues that we need to pay attention to time differences, language and cultural barriers, quality expectations and concerns, compliance, production scheduling/inventory and logistics.

Consider his thoughts on compliance: “Suppliers' failure to comply with social responsibility, quality, environmental and safety standards can be detrimental to your company's relationships with customers. Make sure suppliers understand both the standards and your expectations, and give them a reasonable period to come into compliance. Regular audits of major suppliers are a must; in some cases it may be worth hiring a neutral auditor to verify that proper practices are being followed.”

A good summary, no doubt. But more broadly, when reading his tips and considering the expectations of our own readers and subscribers today (especially inside larger companies), another thought jumped into my mind: global sourcing is dead. Or perhaps put more accurately, procurement (and sourcing) today is global by nature. There is no longer a need to differentiate between regional and global.

Moreover, it seems to me that many of these concerns and risks point to the need for “global standards,” which must be enforced regardless of country and supplier locale. Yes, distance matters (more on this in Part 2, tomorrow).

But distance and “global” are different.

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