Panjiva Speaks: What Can We Expect From Global Sourcing in 2011?

Without question, the stakes are higher than ever when it comes to implementing and managing the right global sourcing strategies. Whether you're attempting to service local markets by managing local suppliers and production facilities or relying on global suppliers for export as a cost advantage or means to secure adequate supply, the global sourcing landscape has become more uncertain than ever. The basic cocktail recipe is as follows (more advanced drink recipes are also available): add three parts China politburo meddling to two parts US competitive disadvantage (in part due to higher taxes, environmental regulations, national debt, and other limiting policy) to two parts commodity and currency volatility to one part EU debt meltdown and voila, you've got a drink that will clear all inhibitions if you don't pass out after quaffing it down.

On more sober note, others are doing a better job than us at predicting what 2011 may bring on the global sourcing front (other than a continued, pounding hangover from all that Chinese oxidized "wine" that I swear is designed as a ploy to poison Westerners). In a recent post, Panjiva suggests that we should expect a number of global sourcing trends in 2011 including rising costs, greater protectionism, a rising emphasis on "global" in global sourcing beyond China, and greater sourcing investment. While the first three trends we've covered ad nauseum on Spend Matters and MetalMiner, the fourth one merits a closer look.

Specifically, Panjiva's Josh Green suggests that in 2011, "Sourcing Teams Will Again Be Investing (Not Just Holding on For Dear Life)." What areas are likely to be the greatest beneficiaries of this new investment? Josh proffers that geographic trend analysis to help "sourcing teams to understand the sourcing landscape and be able to conduct supplier due diligence across a wide variety of geographies" will combine with cost analysis, supplier collaboration and process improvement focused on engineering-based cost take out to help drive a new chapter in global sourcing in 2011. To this list, I would add greater emphasis on total cost management/cost models, IP protection and strategy, commodity management and integrated skills deployment (e.g., procurement, supply chain, customs/compliance, tax, etc.) as likely areas of new investment for the forward-looking global procurement organization.

One final thought on the IP protection/strategy point: Spend Matters would like to offer a prize (payable in a case of Bell's Two Hearted Ale) to the first corporate IT geek who can create a Stuxnet-like virus that infects Chinese industrial control systems in cases where IP was stolen from US companies during hacking/espionage exercises.

Jason Busch

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