Global Sourcing is done as part of the buying process for getting materials and products from other countries outside the home country for availing special benefits. This is due to the fact that different countries have a different price for the same products and services due to the extent of development. Another factor that contributes to the lower price will be the availability of raw materials in the specific country in abundant quantity. The following are the major reasons for doing global sourcing as part of international business.
Accessibility of Raw Materials
If the raw material available for the manufacturing is available in other countries it is good to depend on global sourcing for the supply. Possibilities for economical factors also need to be considered while contacting global sources for the requirement of the materials.
Availability of Cheap Wages
Certain tasks that are cheaper in other countries can be outsourced for economical reasons. However, the quality of the service offered must be checked for meeting the standards while choosing global supplies of labor. It should also be ensured that the latest technology is being used for the manufacturing of goods is being used by the employees in the other country.
Reciprocation of Services
In certain cases, global sourcing can be done for mutually agreeable terms. If the products being manufactured by your company is being sold to another country which has the required raw material then both import and export can be done in that country. Better bargaining power can be utilized in such cases and mutually agreeable terms can be reached.