Global sourcing is an increasingly popular business strategy, but it’s not easy to execute. There are seven typical characteristics of organizations with outstanding global sourcing.
Global sourcing is an advanced but complex approach to sourcing and supply management. The authors use survey research to gauge the extent to which companies are currently practicing global sourcing, which involves integrating and coordinating common items, materials, processes, technologies, designs and suppliers across worldwide buying, design and operating locations. In a sample consisting of supply executives primarily from large North American-based multinationals — particularly manufacturers, the majority of survey respondents said their companies practice some form of international purchasing, a less integrated and coordinated approach than global sourcing. However, more than 70% of managers surveyed said that their companies plan to use global sourcing in the future.
The authors identify a set of features common among companies that excel at global sourcing. The features cluster into seven broad characteristics: executive commitment to global sourcing; rigorous and well-defined global sourcing processes; availability of resources needed for the global sourcing initiative, including access to qualified personnel and budgets; information technology systems that support data analysis on a worldwide level; organizational design features that support the initiative, such as an executive committee that oversees global sourcing; structured approaches to communication, such as regular strategy review sessions; and methodologies for measuring savings from global sourcing.