international sourcing

1. International sourcing
Presented by
Shafeek S

2. GLOBALSOURCING
the process of identifying, developing,
and utilizing the best source ofsupply for
the enterprise, regardlessof location

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

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

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

6. REASONS
• Reducing overall coststructure
• Availability of a new technology and
capacity
• Establishing alternative sources of
supply
• Government incentives

7. • Access to new designs or specialized
intellectual capital
• Superior quality

8. FACTORS
1.Material Costs
2.Transportation Costs
3.Inventory carrying out
4.Cross-border taxes, tariffs, andduty
costs
5.Supply and operationalperformance
6.Supply and operationalrisks

9. GLOBALRISK ISSUES
1.Distance
the distant between the buyer and
selling firm is significant in terms oftime
zones and physical location.

10. 2.Communication
can be described as the glue that holds
togethera sourcing relationship

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

12. 4.Quality Issues
the buying firm must
spend the necessary
time to correctly
specify and
articulate quality
expectations

13. 5.Pipeline inventory
pipeline inventory
issues will always
occurwhen a third
party (the shipper)is
involved.

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

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

16. COUNTER TRADE
Exchange of goods for goods in full or
partial payment of asales transactions.

17. FORMS OF COUNTERTRADE
1.Offsets
are commercial practices
required as acondition of
purchase of goods and
services.

18. 2.Indirect offsets
occur where products or
services transferred in an
offset arrangement are
unrelated to the specific
products referred toin the
export agreement

19. 3.Coproduction
this form of agreement
involves that purchaser
being given a share in the
manufacture of a foreign
designed product.

20. 4.Licensed production
iswhen the recipient
obtains a share of the
production work for its
own order.

21. 5.Subcontractor production
in this case the prime
contractor substitutesan
existing supplier withone
located in the buying
country.

22. 6.Barter
the non monetary
exchange ofgoods-for-
goods.

23. 7.Counter purchase
the seller exchanges
products for
compensatory amountsof
commodities.