GLOBAL SOURCING AND PRODUCTION SHARING. Problems Related to GLOBAL SOURCING. Growing Economic power of Developing Countries

1. GLOBALSOURCING
AND
PRODUCTIONSHARING
PRESENTED BY :-
Anitha S
2nd M.Com
Under the Guidance Of:-
Miss Ramya S. K.
Faculty Member, PG studies in Commerce
G.F.G.C.W. Holenarasipura

2. CONTENTS
 Introduction.
 Meaning.
 Reasons
 Advantages
 Disadvantages
 Problems Related to GLOBAL SOURCING.
 Production Sharing:- Meaning
 Growing Economic power of Developing
Countries
 Conclusion.
 Reference.

4. GLOBAL SOURCING
‘’’Global sourcing’’’ is the practice of [[Procurement|sourcing]] from the
global market for goods and services across [[geopolitical]] boundaries.
Global sourcing often aims to exploit global efficiencies in the delivery of a
product or service. These efficiencies include low cost skilled labor, low
cost raw material and other economic factors like tax breaks and low trade
tariffs.
INTRODUCTION

5. MEANING
Global sourcing is a procurement strategy in which a business buys
goods and services from international markets across geopolitical
boundaries to save money by using cheap raw materials or skilled
labor from low-cost countries. …

6. Common examples of globally sourced
products or services include……
 labor-intensive manufactured products produced using
low-cost Chinese
 call centers staffed with low-cost English speaking
workers in the [[Philippines]], [[India]].
 It work performed by low-cost programmers in India and
Pakistan and [[Eastern Europe]].
 While these are examples of [[Low-cost country
sourcing]], global sourcing is not limited to low-cost
countries.

7. Reasons for off Sharing
 Lower Price.
 Better Quality.
 Only source available.
 More advanced technology.
 More Co-operative delivery.

8. Advantages of Global Sourcing
 Low cost Manufacturing.
 Typing skills & resources those are not
available in the home nation.
 Seeking the benefit of alternate suppliers.
 Utilizing efficient supply chain management
system.
 Learning global business skills.
 Meeting competition prodently and
efficiently.

9. Disadvantages ofGlobal Sourcing
 No exposure of international culture, traditions and beliefs.
 Hidden costs related to different time zones and languages.
 Financial and political risks associated with emerging economies.
 Risk of losing intellectual properties,patents and copyrights.
 Long lead times.
 Labour problems and labour related issues.
 Unnecessary shutdown and supply interruption.
 Difficulty in supervision.
 Difficulty of monitoring goods and services quality.

10. Problems Related to GLOBAL SOURCING
 Language barrier.
 Cultural difference.
 Climate/time difference.
 Distance issue.

11. Production Sharing

12. Production Sharing
 Production Sharing is a natural effect of
the growing international sourcing
production Sharing a term introuduced
by PETER FERDINAND DRUCKER.
 Production Sharing refers to the process
of carrying out different stages of
manufacturing of a product in several
countries.

13.  Production Sharing is common in many
industries including high technology and
sophisticated products. The technical
development and designing may be done in
one country, the various components may be
manufactured in different countries the
assembling may be done in some other
countries and the product may be marketed
globally.

14. Growing Economic Power of Developing
Countries.
 Issue:-
1. Economic growth is the most important means of raising
people’s incomes and reducing poverty in the developing
world it creates jobs and opportunities for poor people to
support their families and build more stable futures.
2. Many developing countries face particular challenges that
make it difficult for them to stimulate and sustain
economic growth. These challenges include weak
institution,high unemployment and poor infrastructure a
lack of access to financial services and unsuitable laws
and regulations.

15. Economy developing countries set to A/c for
nearly ⁶⁰% of world GDP by 2030 according to
new estimates:-
1. The rapid growth of emerging economies has led to a shift in
economic power forecasts based on analysis by late economist
angus maddison suggest that the aggregate economic wight of
Developing and emerging is about to surpass that of the countries
that currently make up the advanced world.

16. Share of the global economy in
purchasing power Prity terms:-
1. While the 1990os was a last decade for much of the developing world,
growth rates picked up significantly in the 2000os,with the number of
Developing Countries beginning to converage strongly with the offluent
OECD countries leaping from 12 to 65 the strong performance of China
And India has had a significant impact on the rest of the developing
world.

17. Conclusion
The success of Global Sourcing projects
rely on careful attention to the selection
of suppliers, development of proper
documentation and procedures and
torgeting the best countries to meet the
objectives of your organization.

18. Reference
International Business (Rakesha Mohan
Joshi)…..