Question

What are the behavioral and cultural issues that a purchasing agent needs to be aware of in order to ensure a successful global sourcing program? What are some ways to manage these issues?

Answer 1

Behavioral and cultural issues that a purchasing agent needs to be aware of in order to ensure a successful global sourcing|
and how to tackle them

1.International sourcing is not purchasing

Global sourcing managers must have a broad background across several functional disciplines; have access to corporate resources, and employ a great deal of common sense.It is foolish to proceed with any international sourcing activity or outsourcing program thinking an out-of-the-box solution can be applied in an organized and thoughtful manner.

2. Offshore sourcing may not always help

While offshore sourcing offices could appear to help reduce total cost of ownership (TCO), they can also create headaches. Just as sourcing managers must understand the social and business cultural differences of the LCC, the sourcing office general manager on the ground in the LCC must understand Western culture and business practices, especially those specific to his company

3. Familiarize yourself with the locals and culture

Its good to Familiarize yourself with local social and business cultures. Lack of familiarity with foreign social and business cultures and, communications issues that surface based on differences, are the biggest reasons international sourcing activities fail, particularly in Asia

4. Work closely with suppliers

From prototype and new product introduction (NPI) through first article unit inspection and production volume increases always work closely with your suppliers
Develop a working knowledge of the product , product export documentation requirements.Aspects of supply chain management through product end of life (EOL) are also each equally important to understand

5. Develop a working knowledge of contracts.

Be able to negotiate not only price but also payment terms, return or repair compensation, and safety or buffer consignment inventories, to mention a few items key to good suppliers contracts

6. Identify suppliers in low-cost regions carefully.

This should be followed by rigid procedures involving qualification qualification (including design, quality, production, and financial capabilities) of potential suppliers at their factory sites (not supplier corporate offices). This also involves verification of relative ISO and other international standard certifications.