Challenges In Global Sourcing 6w111t

Challenges in Global Sourcing 1. Cultural and language barriers-pose a much greater obstacle than most organizations anticipate. They believe other people will want to do business with them and any language obstacles will be solved. The default language of commerce is English. However, the standards of English usage vary tremendously by country and individual. This can lead to serious misunderstandings even if the of business are put in writing. In fact, it can be worse than if the two parties cannot speak a common language. In this case translators must be used and people will tend to be very careful how they communicate 2. Sourcing markets-This is whereby there is dynamic environment with growing complexity thus when procurering managers encounter difficulty due to change in manufacturing of products cost by labour development in the current market 3. Customer market-Retailers aim for efficiency and control which is aimed by retailers who choose improved pricing,quality and customer service they get 4. Problem of ensuring consistency of quality-personnel around the globe are trained in inspection,standards ,technical and production know how,thus lab testing on every order,Monitoring production status and on-time delivery is done. 5. High cost-High cost are incurred when procuring goods abroad due to the kind of communication that is made between the buyer and the seller whie explaining on the kind of goods they would wnt to be supplied with thus creating unnecessary operating cost. 6. Problem of identification of goods-This problem happens due to the inadequacy of time in selection of goods because the process is done in a hurriedly manner which might render the procurement entitity to procure low quality goods. 7. Difficulty to ensure consistent quality levels and ethical standards-Quality goods are likely not to be procured in a consistent manner due to the many suppliers in the market thus making it difficult to identify a genuine supplier with quality goods. 8. Difficulty to manage warehousing and inventories-A challenge comes up when storage of the procured goods are delivered since various suppliers make their deliveries at different intervals thus coming up with the annual procurement report tends to be a problem 9. Undeniably increase in supply chain risk-To mitigate this a multi-functional approach should be undertaken so thatlanded cost,volumes,inventory management,ownership issues and all the other factors that are riskj sensitive can be considered together 10. Prompt increase in buffer stocks-this occurs especially where there are onerous customers service levels requirement s and this can be eliminated through seeing an increase in the use of techniques such as vendor managed inventory driving to establishment of deeper and long term relations with vendors 11. Obsolescence-This is a major concern in high-tech industry whereby companies are looking for logistic models to shrink inventory. 12. Dynamic changes in customers preference-Public enities undergo through problems when changes comeup with the changing environment thus making the customers to have a different preference on the kind of goods that they ordrerd.