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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