Assessment of the Advantages and Disadvantages of Global Sourcing Strategies, in Relation to the Purchasing Decision

Assessment of the advantages and disadvantages of global sourcing strategies, in relation to the purchasing decision

Global Sourcing could be defined as International purchasing where international purchasing means:

“An organization that seeks to identify the most cost-effective product manufacturers across the globe. The international procurement organization will then convey this information to manufacturers looking to reduce production costs.”
(Business Directory, 2011)

As seen in the above definition global sourcing or international purchasing would means that a company will research for materials that are most effective internationally. Also a global sourcing strategy is described as an approach which organisations would source materials from foreign countries. This could be conducted due to the fact that the foreign countries would produce materials of a better quality than that of locally or else the specific materials are not available locally. The aim of global sourcing is that of providing a framework that would helps to ensure trouble-free outsourcing experience. It would establish a clear management structure.

The main reason why ToysWorld Ltd would decide to source from different countries is that a country might has an effective production of certain type of material needed for the production of toys. Moreover other reasons would include the following:
  * To be able to improve the supply security by having another source
  * Having the best quality possible in toys due to the fact that companies from different countries would be specialised in certain area for example in ABS Plastic Granules
  * To be able to improve the financial position through cost savings
  * To get competitive pricing and get a good market share.

Moreover there are a large number of factors which will influence the development of global logistics. Therefore the following would include:

  * A very important factor would be the development of IT which help ToysWorld...