Discuss the Nature of Social and Labor Issues That Domestic Manufacturers Will Likely Face With Their International Suppliers
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.
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.
The world nowadays is too small to be comfortable in your own market, where you will face saturation and perhaps even decline.
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