Will a Falling Dollar Once Again Encourage Global Sourcing? It's Not That Simple …

Quick, change the course of the boat that was headed toward China to Mexico. Thanks to a rising dollar, might global sourcing strategies once again dominate the efforts of US companies trying to save money on direct material purchases in the coming year? And who will be the beneficiary of this shift? Supply Excellence recently suggested that Indoneasia might become the next global sourcing hotspot. But I won't speculate on individual countries other than to say that the only constant in the volatile world of currencies and commodities appears to be change. And just as important, when companies consider global sourcing strategies on the strength of the currency in which they're buying, they should also consider underlying commodity prices and availability in specific markets. Contrary to what many category managers think, the price of a commodity such as resins, steel sheet or copper wire can vary significantly from one regional market to another, even on the same day. Hence, the underlying commodity fundamentals of specific geographies should also play a key role when considering one region over another. This is also one reason, I suspect, why I'll make an anecdotal observation that even in this time of cost cutting, supply and commodity market intelligence budgets are actually going up.

Jason Busch

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