Over the last twenty years, communication on a global basis has migrated from telexes, to faxes, and now emails. During that time, global sourcing evolved from red-headed step child status in the 80s, to a strategic initiative in the 90s. Today it is a survival strategy that touches all companies, regardless of size, location, or product. Yet global sourcing continues to operate outside the main stream business processes in multi billion dollar businesses, buried in spreadsheets and emails that are invisible to the rest of the organization.
As borders that once hindered trade continue to blur and technology compresses time at ever dizzying speeds, the impact on retailers and their suppliers has been profound and urgent. The rewards on average are worth the effort - an effective sourcing strategy can reduce cycles and costs by about 30 percent. The industry winners will be those who implement the most effective sourcing strategy, leaving others behind.
Today’s leaders are already shifting their focus and demanding a business process that delivers one way to source and buy goods that operates uniformly across the organization and its supplier base, regardless of where the goods are produced. They recognize that because goods can be manufactured in multiple countries - including the buyer’s own home country – product offerings must be viewed relative to price and delivery, with country source a secondary condition.
The tools, however, that are employed to respond to a global economy are still patchworked together. Most retail organizations have simple and efficient domestic sourcing systems in place but have complex, disjointed international sourcing systems. Their current technology fails to recognize the fundamental shift in perspective needed to support an organization’s ability to execute on boardroom initiatives to deliver products faster, better and cheaper from anywhere in the world.
Ideally they should re-work sourcing systems by unifying the disparate systems into one sourcing infrastructure. Instead of ripping out the old and replacing it with all new technology – a painful, lengthy, and expensive endeavor - streamlining the systems on one technology platform allows retailers to bridge the “global gaps.” New sourcing technologies are not only simpler than the previous systems; they enable retailers to broaden their supplier base and collaborate earlier in the plan and buy cycle.
The result of the sourcing technologies that unify domestic and international planning, product development, and buying is the next “great leap” in global sourcing. Web-based systems are a viable sourcing strategy for all companies both big and small. These simple, no-training, easily deployed solutions bring small companies the possibility of sourcing with numerous small overseas suppliers and are beginning to have a great leveling effect on international trade.