The document discusses global sourcing, which involves identifying the best supplier regardless of location. Global sourcing includes shared services and outsourcing solutions that can be implemented domestically or offshore. Key factors to consider in global sourcing include material costs, transportation costs, inventory costs, taxes and duties, supply performance, and risks. There are also quantitative aspects like logistics and economics, and qualitative aspects such as political, legal, and cultural factors. Risks of global sourcing include distance from suppliers, communication challenges, currency fluctuations, quality issues, and staffing needs.

1. CADORNA CALAWOD BELA-ONG SAWIT

2. GLOBAL
SOURCING
the process of
identifying, developing,
and utilizing the best
source of supply for the
enterprise, regardless of
location

3. GLOBAL
SOURCING
Global sourcing
comprises both shared
services and outsourcing
solutions that can be
implemented
domestically and
offshore.

4. GLOBAL
SOURCING
Shared Services
concentration of an
organization’s resources;
performing similar activities,
normally distributed across
the organization, to service
multiple internal partners with
the common goal of
achieving customer
satisfaction

5. Outsourcing
GLOBAL
SOURCING
the provision by a third party of defined services, which
can involve a transfer of assets, intellectual property
and/or staff

6. COMMON REASONS FOR
GLOBAL SOURCING
Reducing overall cost structure
Availability of a new technology and capacity
Establishing alternative sources of supply
Access to new designs or specialized intellectual
capital
Government incentives
Superior quality

7. GLOBAL SOURCING
FACTORSGlobal sourcing factors that must be understood and
balanced can be segmented into six categories:
1. Material Costs

8. GLOBAL SOURCING
FACTORSGlobal sourcing factors that must be understood and
balanced can be segmented into six categories:
2. Transportation Costs

9. GLOBAL SOURCING
FACTORSGlobal sourcing factors that must be understood and
balanced can be segmented into six categories:
3. Inventory carrying out

10. GLOBAL SOURCING
FACTORSGlobal sourcing factors that must be understood and
balanced can be segmented into six categories:
4. Cross-border taxes, tariffs, and duty costs

11. GLOBAL SOURCING
FACTORSGlobal sourcing factors that must be understood and
balanced can be segmented into six categories:
5. Supply and operational performance

12. GLOBAL SOURCING
FACTORSGlobal sourcing factors that must be understood and
balanced can be segmented into six categories:
6. Supply and operational risks

13. HIDDEN COSTS OF
GLOBAL SOURCING
1. Internal Expenses
2. Supplier Health
3. Post-contract lull
4. Duty and tariff changes
5. Contract non-compliance
6. True inventory costs
7. Logistics Volatility
8. Technology
9. Quality breakdown

14. QUANTITATIVE AND
QUALITATIVE
ASPECTS

15. QUANTITATIVE
ASPECTSthose that are easily measurable
Logistics
Economic
Quality
Information and Communication

16. QUALITATIVE
ASPECTSthose which are more difficult to quantify
Political
Legal
Cultural
Bureaucratic
Environmental
Ethical Nature

17. GLOBAL RISK
ISSUES
1. Distance
the distant between the
buyer and selling firm is
significant in terms of time
zones and physical
location.

18. 2. Communication
GLOBAL RISK
ISSUES
can be described as the
glue that holds together a
sourcing relationship.

19. 3. The value of money
GLOBAL RISK
ISSUES
Currency Exchange Rates.
Depending on the
performance and strength
of the dollar, goods can
cost American firms
different amounts from
what's expected.

20. 4. Quality Issues
GLOBAL RISK
ISSUES
the buying firm must
spend the necessary time
to correctly specify and
articulate quality
expectations.

21. 5. Pipeline inventory
GLOBAL RISK
ISSUES
pipeline inventory issues
will always occur when a
third party (the shipper) is
involved.

22. 6. Staffing
GLOBAL RISK
ISSUES
if a buying firm is to be
effective with an offshore
sourcing strategy, it must
either hire experts or
develop specialists that
are assigned to offshore
suppliers.

23. NEGOTIATION
Negotiation is a process in
which explicit proposals are
put forward for discussion in
order to reach
agreement on an exchange
or on the realization of a
common interest where
conflicting interests are
present.

24. NEGOTIATION
when negotiating a
purchase agreement,
there are general
attributes in dealing with
various offshore
suppliers.

25. FOREIGN TRADE
ZONES
FTA Act of 1934
created trade zones to
encourage exports from
foreign countries
The act allowed for the
storage of goods within the U.S
boundaries without payment
until the goods passed to the
buying company

26. EU (European Union)
the formulation of this leads to
the elimination of customs
formalities between countries.
There also will be tariffs
reductions in 4000 categories
of manufacturing goods as
well as other schedules for
reducing trade barriers.
FOREIGN TRADE
ZONES

27. COUNTER TRADE
exchange of goods for goods in full or partial
payment of a sales transactions.
FORMS OF COUNTER TRADE
1. Offsets
are commercial practices
required as a condition of
purchase of goods and
services.

28. COUNTER TRADE
exchange of goods for goods in full or partial
payment of a sales transactions.
FORMS OF COUNTER TRADE
2. Indirect offsets
occur where products or
services transferred in an
offset arrangement are
unrelated to the specific
products referred to in the
export agreement

29. COUNTER TRADE
exchange of goods for goods in full or partial
payment of a sales transactions.
FORMS OF COUNTER TRADE
3. Coproduction
this form of agreement
involves that purchaser
being given a share in the
manufacture of a foreign
designed product.

30. COUNTER TRADE
exchange of goods for goods in full or partial
payment of a sales transactions.
FORMS OF COUNTER TRADE
4. Licensed production
is when the recipient
obtains a share of the
production work for its own
order.

31. COUNTER TRADE
exchange of goods for goods in full or partial
payment of a sales transactions.
FORMS OF COUNTER TRADE
5. Subcontractor production
in this case the prime
contractor substitutes an
existing supplier with one
located in the buying
country.

32. COUNTER TRADE
exchange of goods for goods in full or partial
payment of a sales transactions.
FORMS OF COUNTER TRADE
6. Barter
the non monetary
exchange of goods-for-
goods.

33. COUNTER TRADE
exchange of goods for goods in full or partial
payment of a sales transactions.
FORMS OF COUNTER TRADE
7. Counter purchase
the seller exchanges
products for
compensatory amounts of
commodities.