Mistakes in Global Sourcing

                                                                                         

Global sourcing and multinational purchasing can be very tricky because although it can be

very cost effective, the wrong move can cause for very expensive mistakes. As we know,

global sourcing is what is used to make sure to reduce multinational purchasing costs when

acquiring new products, manufacturing these products, and then selling them. This makes

global sourcing an integral part in international trade when extending operations overseas

that bring in new challenges on the operational and commercial levels.

You see, without international trade we would be restricted to those things within our own

borders, which would limit what we have access to since every country can't have every

viable resource within their own borders. Global sourcing allows for significant economic

advantages stemming from the multinational purchasing of each country to manufacture the

goods that make life easier for the consumer. As these global sourcing operations expand,

they get more complex, which leaves more room for mistakes.


-Rushing to make the money

International trade can be compared to our personal lives, anytime we rush we will make more

mistakes than if we take our time and be late. Even though we may be late the chances of

making a huge mistake are reduced considerably. This rushing is a mistake that is made in

global sourcing and even in multinational purchasing in international trade operations.

Competition in international trade puts a lot of pressure on corporations, so they want to

be the first to outsource to reduce costs or the first to initiate multinational purchasing

relations with certain companies. When we take into consideration that the United States

alone uses global sourcing and multinational purchasing to seek out anywhere from 50% to

even 90% of the products that are in use in the United States, we see how there is room for

mistakes.



-The employees

Certain international trade departments are supposed to work hand-in-hand. An example of

this is how global sourcing has an impact on multinational purchasing. In turn, global

sourcing and multinational purchasing has an impact on international trade and then the

import of items influences the manufacturing of the goal product. Each international trade

department has their own focus with different degrees of compensation that either

discourages or motivates an employee. If a global sourcing officer is paid poorly, then he

or she will not focus as well as the employee that is paid extremely well unless the lower

paid employee is extremely dedicated.

These only list a couple of mistakes a company can make in global sourcing. Rushing and

poor compensation tend to be an issue with many employers and one would think these mistakes

would be recognized, but because the world is moving so fast in international trade and

multinational purchasing, no one can find the time to focus and compensate properly.

Business is a competition and international trade is part of that competition, so it is a

matter of who gets there first.

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