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Global Sourcing
Global sourcing is a relatively new trend that has developed in recent years. Unlike conventional sourcing, global sourcing is not limited to a specific market or manufacturer, but companies try to find the best products in the entire market. This makes it possible to reduce production and procurement costs while obtaining high-quality products.
Global Sourcing: How has the focus on procurement markets changed?
In the past, the lowest manufacturing price was often the decisive factor. But high transport costs, increased quality demands of customers, the desire for sustainability, and the recent crises have shifted the focus.
Companies are therefore looking for alternatives on the global market with short transport routes, better quality controls, and a good infrastructure.
What role can Central and Eastern Europe play as a procurement market?
Central and Eastern Europe (CEE) now offers flexible and cost-effective procurement markets. With access to a wide range of industrial capabilities available in the region, it is easier than ever for companies to source their materials of high quality.
The cost savings of sourcing of raw materials and products from CEE are significant and play an important role in gaining a competitive advantage in the international market. Proximity to European markets also makes it easier for companies to adapt their supply chain management system to the needs of the company and customers alike. By strategically positioning their sourcing location, companies can significantly reduce the transportation of their products and thus save costs.
In addition, Central and Eastern Europe offer qualified skilled personnel. Even though CEE is still relatively new as a procurement market, it has already proven to be a worthwhile option for many companies. When companies realise the impact global sourcing can have on their overall business, they can better exploit the potential of this procurement market.
What role will Asia continue to play as a procurement market?
Although CEE is increasingly changing the focus of companies, Asia remains one of the most important procurement markets. The reasons for this are obvious: Asia is one of the largest production locations in the world and thus offers ideal opportunities for the development of new products and services.
Therefore, it will continue to play an important role as a procurement market. This is mainly because Asia's labor and raw material costs are still significantly lower than in other regions. But this trend is slowly reversing due to high transport costs and rising wages in Asia, and Eastern Europe in particular is moving more into focus as a procurement market.
What are the factors for successful procurement?
A key success factor in procurement in the automotive sector is the quality of the components produced. The manufacturers must ensure that their products meet the high demands of the customers. In addition, all parties involved must establish tight control mechanisms to ensure the quality of the components produced.
Delivery reliability is another factor for successful procurement. This is because manufacturers must ensure that their suppliers deliver the ordered components on time and in the desired quality. This requires close cooperation between the companies involved, as well as transparent communication.
Flexibility is also part of successful sourcing. This is because manufacturers must be able to adapt to the constantly changing requirements of their customers. This requires a high degree of flexibility for suppliers. They must be able to react quickly to changes and deliver the desired products on time.
If you would like to learn more about the topic of global sourcing and how you can fully exploit the potential of your company, please feel free to contact us.