Achieving Excellence in Global Sourcing

This is an MIT Sloan Management Review article. Global sourcing is an advanced but complex approach to sourcing and supply management. Uses survey research to gauge the extent to which companies are currently practicing global sourcing, which involves integrating and coordinating common items, materials, processes, technologies, designs, and suppliers across worldwide buying, design, and operating locations. In a sample consisting of supply executives primarily from large, North American-based multinationals, particularly manufacturers, the majority of survey respondents said their companies practice some form of international purchasing, a less integrated and coordinated approach than global sourcing. However, more than 70% of managers surveyed said that their companies plan to use global sourcing in the future. Identifies a set of features common among companies that excel at global sourcing: executive commitment to global sourcing; rigorous and well-defined global sourcing processes; availability of resources needed for the global sourcing initiative, including access to qualified personnel and budgets; information technology systems that support data analysis on a worldwide level; organizational design features that support the initiative, such as an executive committee that oversees global sourcing; structured approaches to communication, such as regular strategy review sessions; and methodologies for measuring savings from global sourcing.

• Manufacturing processes
• International business
• Sourcing