Global Sourcing

Create and leverage a global supply chain to generate substantial cost savings

Substantial cost savings can be generated through leveraging global supplier capabilities. Global sourcing introduces additional competition into sourcing categories, especially valuable where there are small groups of suppliers and limited local alternatives. Realising these savings in a rapid and sustainable manner requires a clear understanding of regional manufacturing capabilities, a robust process to select appropriate suppliers, and development of strong supplier engagement to ensure on-time, on-budget delivery of high-quality goods.

PIP’s methodology is:

  • Identify target categories or product groups for global sourcing based on required specifications and understanding of regional capabilities
  • Assess product specifications for the required level of detail, creating translations where required
  • Establish a disciplined, uniform, global supplier qualification process which is run by local team members
  • Gather price points from suppliers using tailored global sourcing pricing grids with variations for incoterms, existing vs alternative product specifications, order quantities, etc
  • Conduct due diligence on shortlisted suppliers, negotiate on pricing and other terms
  • Engage with suppliers to create clear plans, including oversight of cost, quality and delivery, from procurement of raw materials through to production and logistics
  • Navigate cultural differences with the help of on-the-ground partners in relevant countries

Capability development is a key feature of all our engagements, which enables clients to maximise ongoing benefits.

We investigated putting in place a global sourcing capability, originating in a major improvement engagement facilitated by Partners in Performance (PIP). As this was a significantly different approach for us, it took a concerted effort to engage and obtain support from stakeholders, culminating in a visit to a number of manufacturing sites in China. From a sceptical starting point, this programme has delivered large impact real benefits, and is now fully supported and is being driven by the business after the PIP team has left the site. HEAD OF GROUP PROCUREMENT AND SUPPLY CHAIN

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