The supply chain strategy is a critical aspect of a company’s operations since it directly affects the level of costs for purchasing materials and resources. International supply chains in this aspect are crucial because they allow organizing the purchase of resources in different business conditions. In the context of the company’s business, it is primarily necessary to consider the dependence of production on supplies from several geographical locations. This factor of production causes a severe need to focus on proper sourcing to keep the business running and maintain the right income level. Properly organized sourcing will allow the company to reduce resource procurement costs and prevent potential problems significantly.
The primary factors of appropriate sourcing
Proper sourcing organization is critical because the company focuses on manufacturing products using resources delivered from various locations. The cost and quality of resources supplied are vital factors in organizing the supply chain. Nevertheless, it is essential to focus on managing uninterrupted supply, which is crucial for the company’s operations (Caridi, Lamberti & Pero, 2019). In this regard, the company must find suppliers to supply quality resources at an optimal price in crisis conditions. In addition, the company can conduct several preliminary negotiations with potential suppliers if the initial source can not perform its functions. Identification of primary suppliers is one of the critical factors in the firm’s work as it allows for the optimization of supply chains and minimizes unforeseen expenses.
Supply chain sustainability in a crisis condition
Given global business exposure to financial crises and other international processes, developing a sourcing strategy that considers possible force majeure events is necessary. In this aspect, it is required for a company to create a sustainable sourcing strategy to keep costs of material procurement at a reasonable level under various market conditions. For this purpose, it is necessary to consider the procurement stages, including upstream and downstream chains (Caridi, Lamberti & Pero, 2019). Specifically, the company must analyze the initial cost of resources and all additional costs associated with warehousing and delivery. Moreover, using digitalization of the supply chain can reduce some of the expenses and improve the sustainability of the business in crisis circumstances (Bienhaus & Haddud, 2018). Thus, the timely organization of all segments of the supply network will allow the company to reduce the risk of unnecessary financial losses considerably.
Strategic sourcing dilemmas
To ensure an optimal income level, the company primarily needs to eliminate the management problems associated with sustainable sourcing. The company needs to formulate a clear supply strategy given several material supply sources. One of the fundamental reasons for the issues with the supply chain organization is a complicated management structure (Ramachandra &. Abeysinghe, 2021). The company needs to implement a clear sourcing policy to optimize the supply of resources. In this aspect, it is necessary to define the organizational interaction at all supply chain stages and create a cost strategy for maintaining the supply chain in various stages of sourcing. For instance, a company can rationalize supply by investing in supplier activities or logistics services. In addition, to avoid potential costs, the optimal measure is to promptly invest in supply chain facilities.
General conclusions regarding the significance of sourcing
The relevance of international supplies is critical for companies that depend on supplying resources from different locations. The organization of a sustainable supply network is one of the vital tasks of a company and requires, above all, the right decisions on a strategic level. Such solutions include identifying the best suppliers and organizing the procurement of resources at all stages. In this aspect, the company needs to use a clear policy in upstream and downstream deliveries to reduce delivery costs as much as possible. Therefore, global sourcing is crucial for a company to purchase materials and components.
References
Bienhaus, F. & Haddud, A. (2018) ‘Procurement 4.0: factors influencing the digitisation of procurement and supply chains’, Business process management journal, 24(4), pp. 965-984.
Caridi, M., Lamberti, L., & Pero, M. (2019) Managing the supply chain management-marketing interface. Bradford, West Yorkshire: Emerald Publishing Limited.
Ramachandra, S. & Abeysinghe, D. (2021) ‘Ethical supply chain disclosures: Are they mere fashion statements?’, IUP Journal of Accounting Research & Audit Practices, 20(3), pp.60-89.