HW 5 - advantage compared to the domestic companies 12 For...

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David Lum SCM 406W 2/18/08 Chapter 10 5. International sourcing differs to domestic in that, it can provide lower costs because of labor rates, cost of material and productivity rates. Also it can be used as a way to introduce competition into the market for the domestic sourcing companies. With domestic sourcing there is no need to do as much integration and monitoring of the supply chain. There are barriers for international sourcing such as language, and culture which isn’t as likely to happen with domestic. 9. A reactive basis means companies only used worldwide sourcing when the market demanded for it or competitors used it and they had to keep up with the competition. In other words, they didn’t see the advantages of worldwide sourcing and only did it out of necessity. 10. Companies will be willing to shift form reactive to proactive if they are able to see the advantages of outsourcing whether from price or being able to network and work more effectively and efficiently because of it. Also being able to see what other countries have as an
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Unformatted text preview: advantage compared to the domestic companies. 12. For companies just entering the global sourcing, they might want to partner with another company who has been the business for a while or even hire a third party and cooperate with them and learn from them. They can also look at previous firms and what they have done when first entering. To prevent long lead times, companies can do test trials and determine how much longer it will take for things to arrive. They can work with the international firm more closely to cut down on led times too. To bridge the gap of the other countries’ language, culture, and business practices, a translator can be hired. Or even someone within that country in order to make sure the business isn’t disrupted by the cultural differences. Also the company should research the business practices. To make sure the company doesn’t have a resistance to change, the advantages and disadvantages should be weighted, in order to fine what works best....
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