Strategic Sourcing Essay Example

company in the footwear and athletic apparel industry, is a representative case in point. It collaborates with over 700 manufacturing plants located in 52 countries.

It is crucial for manufacturers to be ready to face the unpredictable outcomes that come with international sourcing, including political environments, manufacturing practices, cultural differences, natural disasters, and transfer of technology and licensing of intellectual property. Chapter 2, Strategic Sourcing 1, defines strategic sourcing as an approach to the challenges of the information age and globalization, where organizations face pressure from customers to provide shorter lead times for product and service delivery while maintaining high quality at the lowest cost.

The emergence of a new order of relationships called supply chain management (figure 2) is a result of the vast changes in business or operation methods.

The process of purchasing goods and services for production or manufacturing purposes at a profitable cost is known as sourcing or strategic sourcing. During this stage (depicted in Figure 2), individuals or groups evaluate and choose vendors and their offerings based on specific requirements and specifications. The details of this relationship are typically outlined in a contract that covers product/service details, pricing, and service level agreements (UPS Supply Chain Solutions). [pic] Figure 3.

The process of global sourcing involves firms gaining international experience and transitioning from domestic to worldwide coordination and integration of common resources such as items, processes, designs, technologies, and suppliers. Trent and Monczka (2002) state that global sourcing requires horizontal integration within product design and development groups as well as between supply and demand planning activities.