The expanding global economy and increased consumer awareness have driven the industry to perform a continual act of balance over the years. At the same time, companies across the world are often seen striving to offer quality products and services to earn a considerable amount of profit. Global competition implies a substantially reduced life cycle for most products and no longer allows corporations to approach international commerce in a polycentric, country-by-country manner. It is critical for businesses to consistently develop and acquire competencies that will enable them to maintain a durable competitive advantage over their competitors. Keep reading to learn the best practices of global product sourcing and mistakes to avoid: 

Best practices 

• Define your sourcing strategy 

Create a well-defined sourcing strategy outlining your goals, objectives, and expectations. This should entail finding possible suppliers, assessing their skills, and establishing selection criteria. The team must identify and define the current number used, types, sizes, specifications, grades, and so on. Following the selection of a category, it is necessary to assess the cost impact, which includes who offers the resource or service, total expenses involved, contract length and terms, transportation issues, and anything else that impacts current, or future spending. 

• Develop the strategy 

There are numerous ways to obtain a product or service, as well as various relationships that may exist with providers. The development of a global product sourcing strategy will determine how to make a purchase while minimising risk and cost. Managers frequently have a guiding ideology that ascertains their decisions. The strategy will be determined by the level of competition in the supplier marketplace. 

• Select the sourcing process 

A request for proposal process for bids is employed when a competitive method is used. This is where product or service specifications, evaluation criteria, delivery and service requirements, etc. are included. Ensure that all suppliers are aware that they are competing on an equal playing field. 

Pitfalls to avoid 

• Not verifying the supplier 

One of the most typical blunders of product sourcing companies is rushing into the process without first validating the source. To minimise disappointment, you should have clear expectations about product quality before selecting a supplier. Once you’ve found a viable supplier, you should investigate their quality control procedures and look for internationally accepted accreditations. 

• Cost over quality 

Many business owners are enticed by the cheapest supplier with the notion that it would have the highest profit margin, but this can have disastrous implications in terms of product quality. The supplier may have made material compromises or perhaps employed illegal staff, putting the sourcing agreement in jeopardy. 

• Lack of communication 

Another common fault in global sourcing is a failure to communicate with the supplier, which leads to errors and confusion in the supply chain. This could be due to language and cultural issues as well as time zone variations that inhibit continuous communication. 

Conclusion  

To avail yourself of the best solutions and avoid pitfalls, it is recommended that you partner with professional product-sourcing companies who can help your business grow. When done carefully, the strategy can help your business thrive by boosting profit margins and acquiring high-quality products in the industry.