global sourcing
1. Concept
1) What is global sourcing?
Global sourcing is defined as the process of identifying, developing, and utilizing the source of supply for the enterprise through expanding purchasing activities internationally. It is a part of post reengineering activities which is an useful measure of cutting cost. Global sourcing is a typical example of foreign construction outsourcing firms which process construction by distributing each process of construction work to vendors instead of running on its own. Such construction method not only does reduce costs in terms of managing construction sites such as labor cost and equipment cost including vehicles, but also is being adopted by various companies for value-adding construction management (CM) project.
For instance, global sourcing was utilized when building Daewoo Business Center at Warszawa, Poland, on March, 1997. The process of erecting the center was alloted to vendors; construction was executed by VOICE(England), design through RTKL(U.S.), facility management was duty of Dongwoo which is a department of Daewoo Group, hotel management by Hilton hotel(U.S.).
2) Global sourcing factors
Global sourcing factors that must be understood and balanced can be segmented into 5 categories. First factor is material cost. The bottom line of execution of global sourcing is reduce cost by minimizing material cost. Another category is transportation cost. Various costs including inventory delivery cost can be dwindled through global sourcing. Moreover, significant amount of transportation expense can be reduced when marketing products at outsourcing regions. Cross-border taxes, tariffs, and duty costs are third factor which form global sourcing. Instead of relying on domestic production but rather outsource each process internationally, costs can be reduce by avoiding trade barriers which include cross-border tax, tariff and duty cost. Next factor is supply and operational performance. With effective resource
1) What is global sourcing?
Global sourcing is defined as the process of identifying, developing, and utilizing the source of supply for the enterprise through expanding purchasing activities internationally. It is a part of post reengineering activities which is an useful measure of cutting cost. Global sourcing is a typical example of foreign construction outsourcing firms which process construction by distributing each process of construction work to vendors instead of running on its own. Such construction method not only does reduce costs in terms of managing construction sites such as labor cost and equipment cost including vehicles, but also is being adopted by various companies for value-adding construction management (CM) project.
For instance, global sourcing was utilized when building Daewoo Business Center at Warszawa, Poland, on March, 1997. The process of erecting the center was alloted to vendors; construction was executed by VOICE(England), design through RTKL(U.S.), facility management was duty of Dongwoo which is a department of Daewoo Group, hotel management by Hilton hotel(U.S.).
2) Global sourcing factors
Global sourcing factors that must be understood and balanced can be segmented into 5 categories. First factor is material cost. The bottom line of execution of global sourcing is reduce cost by minimizing material cost. Another category is transportation cost. Various costs including inventory delivery cost can be dwindled through global sourcing. Moreover, significant amount of transportation expense can be reduced when marketing products at outsourcing regions. Cross-border taxes, tariffs, and duty costs are third factor which form global sourcing. Instead of relying on domestic production but rather outsource each process internationally, costs can be reduce by avoiding trade barriers which include cross-border tax, tariff and duty cost. Next factor is supply and operational performance. With effective resource