Global sourcing services allow companies to move their supply chains from their domestic country to another location where they can save on costs. However, this process comes with challenges that must be overcome in order to create a positive experience for all parties involved. These six major challenges are some of the most common ones faced by companies who use global sourcing services.
1) Cultural Challenges
Different countries have different cultural norms. What might be perfectly acceptable in one culture might be regarded as offensive in another. Learning how to work within a new culture can take time and patience, but taking a few simple steps before you enter a new market can go a long way toward smoothing your entry into an international community. Try learning about typical customs, taboos, gestures and greetings for each country you’re considering entering. These will help you avoid missteps that could negatively impact your reputation from day one. Understanding how business is conducted in specific countries will also keep you from inadvertently offending anyone or breaking any laws along the way.
2) Communication
The company must have a clear, transparent process to communicate with your team. You should know exactly who you’re communicating with and what each person’s role is in fulfilling your order. In addition, they should be able to quickly answer any questions you have about your order to ensure that everything goes smoothly from start to finish. Some procurement companies in the USA do not have a dedicated customer service department for their global sourcing services, which can pose a problem if something goes wrong or you need to contact someone directly. Having a clear process in place will not only ensure efficiency but also show that they value your business and want it to succeed.
3) Time Zone Differences
Outsourcing a project to a third party is much different than managing a small team. You can’t see your outsourced team members, and that makes it much harder to supervise them and evaluate their performance. This will be especially true for your first outsourcing project, as you won’t have an accurate baseline from which to evaluate results. While you might trust an internal employee, you needn’t jump right into trusting someone from across the world who doesn’t share your business objectives or strategy. The biggest challenge will be collecting data about how effectively they are performing so that you can make adjustments or keep doing what’s working well.
4) Language Barrier
In order to implement a global sourcing strategy, data collection and tracking is an important first step. While information is available from public sources, much of it must be purchased from third-party providers. For those looking to move forward with a plan quickly, a third-party vendor can often provide all of your data for a one-time fee. However, if you have a need for ongoing tracking and services, outsourcing may be more cost-effective in both time and money.
5) Data Collection & Tracking
In today’s globalized world, it is becoming increasingly difficult to keep track of all activities involved in completing a purchase order from start to finish. After all, you have to deal with a supplier located in a different country and factor time zones into your decision-making process. As soon as you initiate a purchase order through your e-commerce site, access to your suppliers will be limited. To maximize your profits and overall supply chain efficiency, it is crucial that you establish data collection and tracking systems that take into account supplier location and time zone differences. The sooner you identify problem areas such as lost communications or dropped purchase orders, the better off you will be.
6) Security & Privacy Concerns
With so many different countries participating in global sourcing services, privacy and security are big concerns. You want to be sure that the personal information you are sharing with vendors is being protected and isn’t at risk of exposure. Likewise, you don’t want your vendor to share your private data with other procurement consulting firms without your permission. Getting clear on exactly what information is going to be shared and how it will be used upfront can help you avoid any security issues in the future. Just make sure that whatever solution you choose is able to satisfy all of your requirements; if not, there could be serious consequences!
