Discuss the Nature of Social and Labor Issues That Domestic Manufacturers Will Likely Face With Their International Suppliers
It seems that global sourcing is best way to go when expanding the business even though, domestic sourcing will provide familiar suppliers. "For example, Wal-Mart identifies common products used throughout the world and "determines whether there is an opportunity to improve quality, reduce costs and, by working with a best-in-class supplier, achieve better replenishment and new item introductions." For instance, Wal-Mart has worked with its copy-paper sales supplier to offer new products and more value to customers throughout the world. y actively working with these suppliers, Wal-Mart has realized sales increases of 46% in England, 94% in Germany, 38% in Canada, and 25% in U.S. discount stores, and a 13% increase at Sam's Club stores".
From the literature review, it can be understood that the companies have changed a lot due to the global aspects; global supply chain is one of the main issues of a business today. The businesses are actively participating in the outsourcing activities in a large way, in order to survive and achieve profitability in this competitive business environment. Global sourcing has become a trend in today’s market and an essential element for the attainment of competitive position. Global sourcing is considered as a complex process and many of the companies are spending a lot of money for the process of global sourcing of raw materials and on other goods and services. Even though there are some of demerits for the global sourcing, majority of companies practice global sourcing as there are more of merits; like high quality, cheaper price, advanced technologies, less labour coat in the developing countries, better lead time, global competitiveness, good reputation, wide variety of suppliers, etc. Core activities are the main central activities which are needed for the successful serving of the company’s customers in each market. The core activities and non-core activities should be identified in this stage, as the process is considered to be complex; necessary care should be taken in order to ensure that the true benefits are assessed and the long term strategies are considered. The process of identifying the core activities can be done by the top level management along with the participation of teams from the lower level, the teams formed should cover a large section of members; functionally, hierarchically and divisionally. The main role of the teams is to find out the important determinants of the competitive advantage in their markets, industries, etc in which the company competes or planning to compete. In general, the framework wants the company to outsource the main non-core activities. Invest in order to perform internally: This focus on investing in the essential resources for bridging the difference between the company and the external providers. If the company does not have any resources and lag in the capabilities when compared to the external providers, then there is no meaning in investing in the resources, which helps the company to match its capabilities against the external provider.A strategic partnership relation or alliance with the suppliers helps a firm to learn and exploit the capabilities of the supplier. The relationship with the suppliers is one the main issues which has to be addressed before outsourcing the core activities of a company. If a company plans to outsource its core activity, then it is better to develop and maintain a partnership relationship with its external suppliers. In order to achieve and maximise a competitive advantage, the company can develop and maintain a better buyer-supplier relationship. Even though the companies try to develop and maintain relationship with their key suppliers, this will exist only till the suppliers maintain its leadership in the advance technology and quality. The future threat towards the customers should also be considered, as there are chances that the suppliers acquire the knowledge and skills from the customer organisation and compete against them in future. The company can follow invest to perform internally strategy, if there are no suppliers available and if the company has suppliers available, then it can develop relationship with the suppliers and focus on the resources which are of high value added.
An organisation requires human and physical resources for an effective business operation. Supply chain management is a strategic planning, control and monitoring of processes involved in the material delivery in a company for production of goods and services. Its main aim is to ensure that the end customer gets constant supply of final goods as per their expectations. Since the late 1990’s procurement has become an important concerns of different business both in service and product industries. Companies are deploying experts in supplies and purchasing in their efforts to ensure they benefit from an effective procurement logistics. In modern globalized economies, international trade has taken preference giving companies the freedom to procure from different parts of the world. This calls for an extension of procurement department roles as it has to consider international logistic matters. It would be misleading to state that there is an effective procurement method that can be applied to all business set up and yield good results. Each business is superior in its own ways and so do the procurement strategies and mechanisms. However, there are common procedures that must be taken for an effective procurement (Ketchen and Hult, 2006). Procurement is part of supply chain management with the role of ensuring that a company gets materials from the most efficient supplier at an appropriate cost. It also ensures that materials and machinery for production are available in the right time at an appropriate quality and quantity. With an effective procurement strategy, a company is bound to benefit. The role of procurement department extends from procuring for raw materials, machineries, office suppliers to developing an effective procurement process (Karp, 2005). This paper analyzes the benefits that effective Procurement activities can have on an organisation.
In conclusion, nowadays, the world is getting flatter and flatter, meaning that the worlds’ resources are within an arm length for nearly all firms, provided they need the right network, skilled labour force and strategy to enter foreign markets. Collaboration between companies is often used to harness themselves against more intensifying competitors, who are obtaining knowledge, and cost advantages as well through collaboration. This continuous cycle makes the world a smaller place to do business in. Eventually all domestic businesses have some international activities, either in exporting, importing or knowledge. The world nowadays is too small to be comfortable in your own market, where you will face saturation and perhaps even decline.
Karp, H. R.,2005. Green suppliers network: Strengthening and Greening the manufacturing supply base. Environmental Quality Management, 15(2),pp. 37-46.
Ketchen, G. and Hult, T.M., 2006. Bridging organization theory and supply chain management: The case of best value supply chains. Journal of Operations Management, 25(2),pp. 573-580.
Khoo, H. H., Bainbridge, I., Spedding, T. A. and Taplin, D. R.,2001. Creating a Green Supply Chain. Greener Management International, 2(35), pp.. 71-78.
Kouvelis, P., Chambers, C. and Wang, H., 2006. Supply Chain Management Research and Production and Operations Management: Review, Trends, and Opportunities. Production & Operations Management, 15(3), pp 449-469.