TAILIEUCHUNG - Lecture Purchasing and supply chain management (3/e): Chapter 10 - W. C. Benton
The subject of Chapter 10 is global sourcing. As firms’ competition heats up, firms will become more global minded. To be a global firm, management must be able to critically evaluate foreign markets. In the current business environment, firms are beginning to develop global procurement strategies. | 1 Chapter 10: Global Sourcing Purchasing and Supply Chain Management, 3rd edition, Copyright 2013, W. C. Benton Jr., All rights reserved Current Trends Significant increases in global purchases Many firms rely on global sourcing to remain competitive and survive Common emphasis on outsourcing of white-collar jobs Issues related to global sourcing: Costs Currency exchange rates Behavioral issues 2 Costs of Global Sourcing Cost categories: Administrative Costs not directly involved with the product ., identification, qualification, program development, travel, broker fees, and others Foreign Costs not incurred if a domestic source were found ., duty charges, customs fees, import fees, and currency exchange costs, etc. Common Costs common to both global and domestic sourcing ., direct labor and materials costs, lead-time costs, transportation costs, inventory costs, etc. 3 Currency Exchange Rates Depending on the length of the contract Foreign purchase cost may change Payment .
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