Why Sourcing from Turkey is a Smart & Powerful Strategy
…Why Sourcing from Turkey is a Smart & Powerful Strategy Read More »
Mitigating the risks of global sourcing
Discover how to navigate the challenges of global sourcing and build a resilient supply chain. Learn the key risk areas and strategies for supplier evaluation, diversification, risk assessment, and quality control. Explore how ET2C International, a leading Global Sourcing company, can simplify your global sourcing journey and ensure success.
The benefits to business of strategic sourcing globally are huge and have been a foundation for many companies and brands to successfully develop their business. The cost and quality of the products available in some markets is so strong that not to source globally can put companies at a serious competitive disadvantage in their markets.
Whilst the benefits are well known and recognised the complexity and challenges of creating and implementing a global sourcing strategy can be daunting ? The last few years of Post Covid turmoil have demonstrated the importance of strong resilient supply chains that can deliver the product your company needs at the quality required.
To these traditional procurement challenges are the reputational and risk issues from Social and Environmental factors that need to be understood and measured.
These factors are consistent across all sourcing whether near or offshore, however they can prove more challenging to manage when the value chain is stretched across many miles, time zones and languages.
ET2C International Strategic Sourcing Specialists
We are a leading Global Sourcing company with over twenty years’ experience working with our clients. Our team of 250 colleagues are based in seven offices in key international sourcing markets across Asia.
We work with our clients to make their global sourcing simple, becoming their bridge to their supply partners. Where time zones, language, business communication expectations or QC can become challenging.
Our team of experts can help you build and deliver your sourcing strategy and ensure you are working with the right factory partners. Giving you independent feet on the ground and confidence with fast responses, removing time zone and language challenges. If you would like to explore sourcing opportunities or see how we have worked with clients to manage risk, quality and compliance across their supply chain.
Please message us at contact@et2cint.com we would be happy to share some examples of how we work.
Managing key risk areas
The first task in managing risk is to understand and bring visibility to the diverse risk elements in a sourcing strategy.
Whilst many of these issues can be managed with a degree of simplicity for shorter or in country supply chains. As supply chains and partners become extended across market and time zones the challenges can mount.
Overall risk assessment and mitigation should be approached by breaking down overall risk into core areas. The extension across the globe can build complexity.
Identification, assessment and management can be more easily managed when broken down into core elements.
- Supplier Evaluation and Selection: Conduct thorough due diligence and assess potential suppliers based on their track record, reputation, financial stability, production capabilities, quality control measures, and compliance with regulations.
- Supplier Relationship Management: Establish strong relationships with your suppliers based on trust, open communication, and transparency. Regular communication and shared vision can move relationship from one of delivering forecast to one built on partnership and shared vision for growth.
- Diversification of Suppliers: Avoid overreliance on a single supplier or region. Diversify your supplier base to minimize the impact of disruptions, such as natural disasters, political instability, or changes in trade policies. Building strong supplier relationships can be create resilience in your supply chain but having potential back up suppliers can be valuable.
- Risk Assessment and Contingency Planning: Identify potential risks that could impact your sourcing operations, such as supply chain disruptions, currency fluctuations, quality issues, or regulatory changes. Develop contingency plans to address these risks, including alternative sourcing options, backup suppliers, and risk mitigation strategies.
- Quality Control and Product Testing: Implement stringent quality control measures to ensure that products meet your specified standards. Conduct regular inspections, audits, and product testing to verify compliance with quality requirements and safety regulations. Implementing robust quality control processes helps minimize the risk of receiving substandard products.
- Intellectual Property Protection: Protect your intellectual property rights by implementing appropriate legal measures, such as non-disclosure agreements, trademarks, copyrights, and patents. Work with suppliers who respect and adhere to intellectual property regulations and have a clear understanding of your IP protection requirements.
- Compliance and Ethical Standards: Ensure that your suppliers comply with ethical and social responsibility standards. Verify that they adhere to labor laws, environmental regulations, and international standards, such as the International Labor Organization (ILO) conventions and responsible sourcing initiatives.
- Continuous Monitoring and Performance Evaluation: Regularly monitor the performance of your suppliers and evaluate their ability to meet your expectations. Continuous monitoring allows you to identify potential risks and take corrective actions proactively.
- Supply Chain Transparency: Establish transparency in your supply chain by mapping the entire sourcing process and understanding the various tiers of suppliers involved. Promote ethical practices, sustainability, and traceability throughout the supply chain to mitigate risks related to social and environmental impacts.
- Stay Informed and Engage Experts: Stay updated on global market trends, economic indicators, geopolitical developments, and regulatory changes that may impact your sourcing operations. Engage industry experts, consultants, or sourcing partners who have in-depth knowledge and experience in global sourcing to provide guidance and insights.
Summary Releasing the value of Global Sourcing
The benefits of a strong global sourcing strategy are clear but to fully realise all the benefits requires planning and focus. As many procurement and sourcing teams are under huge time pressure and so may not have the time of the skill sets to deliver a global sourcing strategy. Working with a trusted partner with a track record of delivery can be critical can ensure that the benefits are delivered without any of the pitfalls.
Mitigating the risks of global sourcing Read More »
Morocco: A Strategic Trade Hub Between Africa and Europe
Morocco is a great sourcing destination for several reasons, including its strategic location, its skilled workforce, and its free trade agreements with Europe and the United States. The country also offers several other advantages, such as its low-cost labour and its business-friendly environment.
Background
The Kingdom of Morocco is in the Maghreb region of North Africa bordered by both the Mediterranean Sea and Atlantic Ocean, directly facing Spain across the straits of Gibraltar. A population of over 37million it is the only Monarchy in North Africa.
Morocco’s economy has grown steadily over the past 5 years, averaging 4% annual growth. This growth has been driven by several main export products and services:
- Tourism: Morocco is a popular tourist destination, and tourism has been a major driver of economic growth. In 2021, Morocco received over 13 million tourists, generating $8.6 billion in revenue.
- Foreign direct investment: Morocco has attracted significant foreign direct investment (FDI) in recent years. In 2021, FDI inflows to Morocco totalled $2.3 billion. This FDI has helped to finance new projects in a variety of sectors, including manufacturing, tourism, and infrastructure.
- Exports: Morocco’s exports have also grown steadily in recent years. In 2021, Morocco’s exports totalled $27.5 billion. This growth has been driven by strong demand for Moroccan goods in Europe and the United States.
- Domestic demand: Moroccan consumers have had more disposable income, which has led to increased spending on goods and services.
ET2C International
We are a leading Global Sourcing company with over twenty years’ experience working with our clients. Our team of 250 colleagues are based in seven offices in key sourcing markets across Asia.
We work with our clients to make their global sourcing simple, becoming their bridge to their supply partners. Where time zones, language, business communication expectations or QC can become challenging.
Our team of experts can help you build and deliver your sourcing strategy and ensure you are working with the right factory partners. Giving you independent feet on the ground and confidence with fast responses, removing time zone and language challenges. If you would like to explore sourcing opportunities within Morroco or to discuss your future supply chain challenges. Please contact@et2cint.com
Government support for business
The Moroccan government has implemented several reforms to improve the business environment and invested in infrastructure projects and educational reform. Morocco export products are vitally important to economic growth. The reforms and investments made so far to support major exports are proving successful. As a result, Morocco’s economy is expected to continue to grow in the coming years. The IMF projects that Morocco’s economy will grow by 3.5% in 2023 and 4.5% in 2024. Morocco’s economic growth strategy is focused on four main pillars:
- Investment in infrastructure: Morocco has invested heavily in infrastructure in recent years, including roads, railways, ports, and airports. This has helped to improve the country’s connectivity and make it more attractive to foreign investors.
- Diversification of the economy: Morocco is diversifying its economy away from traditional sectors such as agriculture and tourism. The government is promoting the development of new sectors such as manufacturing, IT, and renewable energy.
- Human capital development: Morocco is investing in human capital development by improving the quality of education and training. This is helping to create a more skilled workforce, which is essential for attracting foreign investment and promoting economic growth.
- Regional integration: Morocco is a member of the African Union and the Arab Maghreb Union. The government is promoting regional integration to create a larger market for Moroccan goods and services.
These four pillars are essential for Morocco’s economic growth strategy. By investing in infrastructure, diversifying the economy, developing human capital, and promoting regional integration, Morocco is well-positioned to achieve sustainable economic growth in the years to come.
Export diversification building on Agricultural heritage
The diversification of the economy is supporting Morocco’s main export products. Morocco’s focus on expanding its export business has seen the development of manufacturing industry alongside Agriculture as part of Plan Maroc Vert. Morocco’s economic growth strategy has several core elements :
- The Plan Maroc Vert(Green Morocco Plan): This plan is aimed at modernizing Morocco’s agricultural sector and making it more competitive.
- The Tanger Med Special Economic Zone: This zone is designed to attract foreign investment and promote the development of manufacturing and logistics industries.
- The Mohammed VI Polytechnic University: This university is being built to train the skilled workforce that Morocco needs to achieve its economic growth goals.
- Investment in transport infrastructure: As a key enabler to economic growth Morocco has invested in a wide range of infrastructure projects.
- The construction of a new high-speed rail line between Tangier and Casablanca. This line is scheduled to be completed in 2023 and will cut the travel time between the two cities from four hours to two hours.
- The expansion of the port of Tanger Med. Tanger Med is Morocco’s largest port and is one of the busiest ports in Africa. The expansion project will increase the port’s capacity by 70%.
- The construction of a new highway between Casablanca and Rabat. This highway is scheduled to be completed in 2022 and will reduce the travel time between the two cities from two hours to one hour.
These investments are expected to boost trade between Morocco and Europe and make Morocco a more attractive destination for foreign investment.
Major Investors in Moroccan Infrastructure
China has become a major investor in Morocco due to its strategic position and free trade agreements with both Europe and United States. Chinese investment has encompassed a range of strategic initiatives.
- Tangier-Med II port:This is a new deep-water port located in Tangier. It is the largest port in Morocco and one of the largest in Africa. The port was built by a Chinese company, China Harbor Engineering Company (CHEC), and was financed by the China Development Bank.
- Noor Ouarzazate solar power plant: This is a large solar power plant located in Ouarzazate. It is the largest solar power plant in Africa and one of the largest in the world. The plant was built by a consortium of Chinese and Moroccan companies and was financed by the Export-Import Bank of China.
- Casablanca-Rabat high-speed rail line: This is a new high-speed rail line that connects Casablanca and Rabat. The line is 186 kilometers long and was built by a consortium of Chinese and Moroccan companies. The line was financed by the China Development Bank.
- Kenitra Atlantic port:This is a new port located in Kenitra. The port is being built by a Chinese company, China Communications Construction Company (CCCC), and is financed by the China Development Bank.
Moroccon Main Export Markets
Morocco benefits from a strong strategic location for Global Sourcing. It has access to a skilled and cost effective labour force. Free trade agreements with USA and Europe make it an ideal country to use as a sourcing destination. Key export product categories are
Agriculture
Morocco is known for exporting products such as citrus fruits, vegetables, olives, and fish. This diversity of produce allows them to fulfil internal consumption and have enough left over for export. It enjoys a Mediterranean climate, characterized by mild, wet winters and hot, dry summers. This climate, along with a network of rivers and groundwater reserves, facilitates irrigation and agricultural production. Additionally, the country has made substantial investments in water management and irrigation systems, enhancing agricultural productivity.
Textiles
The textile industry in Morocco has a long history which has developed a highly skilled and low labour cost. Close proximity to Europe and Free Trade agreements make Morocco a major exporter of textiles to the world.
Machinery
The Moroccan government has focused on diversifying its major exports to include engineering and machinery. It has established several industrial parks that specialize in the production of machinery. These parks offer businesses several advantages, such as access to infrastructure, skilled labour, and tax breaks.
The Moroccan government has also provided financial assistance to machinery businesses, such as loans and grants.
Doing business in Morocco
The government is business friendly making it easy to operate a business in Morroco. The significant infrastructure investment is also a crucial enabler to making business simpler.
However, it’s important to note that sourcing from Morocco can also come with challenges. Language barriers, cultural differences, intellectual property protection, and ensuring supply chain transparency are factors that require careful consideration and management.
Morocco: A Strategic Trade Hub Between Africa and Europe Read More »
Weathering El Niño: Building Global Sourcing Resilience
Explore the effects of El Niño on global sourcing and shipping and how to build a robust risk mitigation plan to proactively address the potential trading impacts of El Niño.
Introduction
Global weather patterns play a significant role in shaping various industries, including global sourcing and shipping. One such weather phenomenon is El Niño, which occurs periodically and affects sea surface temperatures in the central-east equatorial Pacific. El Nino is more than an interesting and infrequent weather pattern. It has demonstrated the potential to disrupt economies, sourcing strategies, and global trade.
Understanding El Niño
El Niño, a Spanish term meaning “the boy,” refers to the warming of sea surface temperatures in the tropical eastern Pacific. This climate event typically occurs every few years and has significant implications for weather patterns worldwide. When sea temperatures in the tropical eastern Pacific rise 0.5°C above the long-term average, an El Niño is declared.
The effects of El Niño are most strongly felt in the tropical eastern Pacific, where warmer-than-average weather conditions prevail. The phenomenon was named El Niño de Navidad (the boy of Christmas) centuries ago by Peruvian fishermen, who observed its occurrence during the holiday season.
Impact on Global Sourcing Strategies
El Niño can have various impacts on global sourcing strategies, both from the supply and demand side. Changing weather patterns associated with El Niño can lead to shifts in consumer behavior, affecting the demand for specific products. In areas experiencing increased temperatures or power outages, consumers may seek cooling products such as air conditioners, Fans and Generators leading to a surge in demand.
On the supply side, El Niño can disrupt agricultural production worldwide. It can cause droughts in some regions and heavy rainfall in others, directly impacting crop yields and livestock production. The agricultural sector’s vulnerability to El Niño necessitates careful planning and adaptation in global sourcing strategies.
Disruption of Shipping and Logistics
El Niño’s impact on weather conditions can disrupt maritime transportation, affecting global supply chains. Altered weather patterns, including storms and increased wave heights, can lead to port closures, shipment delays, and increased transportation costs. Trade flows may be affected, hindering the timely delivery of goods and increasing logistical challenges.
Natural Resources and Commodities
El Niño has the potential to influence the availability and prices of various natural resources and commodities. Fishing industries can be negatively impacted, as El Niño disrupts marine ecosystems and alters fish migration patterns. Additionally, arable farming may suffer from water scarcity or excessive rainfall, affecting crop yields. The fluctuations in natural resources and commodities due to El Niño can have broad implications for global sourcing and trade.
Scenario Planning, Adaptation and risk Mitigation
Given the potential risks posed by El Niño, companies engaged in global sourcing should incorporate scenario planning and adapt their sourcing strategies accordingly. By anticipating the potential trading impacts of El Niño, businesses can make early adjustments to their supply chain management and mitigate potential disruptions. Developing a plan requires a proactive and comprehensive approach1.
1.Monitor and Assess: Stay informed about El Niño forecasts and developments through reliable sources, such as meteorological agencies and climate monitoring organizations. Understand the potential impacts on key sourcing regions, transportation routes, and commodity markets relevant to your business.
2. Diversify Sourcing: Identify regions and suppliers that are less susceptible to El Niño impacts. Diversify your sourcing base across different countries or regions to minimize the risk of disruptions caused by adverse weather conditions or agricultural supply constraints. Consider the resilience and climate patterns of potential sourcing locations.
3. Supplier Risk Assessment: Assess the vulnerability of your key suppliers to El Niño-related risks. Engage in open communication with suppliers to understand their contingency plans and evaluate their ability to manage disruptions caused by extreme weather events.
4. Supply Chain Resilience: Strengthen your supply chain resilience by developing alternative sourcing options and multiple transportation routes. Collaborate with logistics providers to identify backup routes and modes of transportation in case of disruptions.
5. Risk Insurance and Financial Planning: Consider obtaining appropriate insurance coverage to mitigate financial risks associated with supply chain disruptions. Evaluate your business interruption insurance, cargo insurance, and other relevant policies to ensure they cover potential losses caused by El Niño impacts.
6. Continuous Monitoring and Communication: Regularly monitor the progress and severity of El Niño events and reassess your risk mitigation strategies accordingly. Establish a robust communication system within your organization and with suppliers to ensure prompt response and coordination in case of disruptions. Stay connected with industry associations and networks for updated information and best practices.
By taking these steps, companies can enhance their preparedness and resilience to mitigate the risks associated with El Niño on global trade and sourcing. It’s crucial to regularly review and update your risk mitigation plan as El Niño patterns and risks evolve over time.
Conclusion
El Niño, a recurring weather phenomenon, can significantly impact global sourcing and shipping. From disrupting agricultural production to affecting energy generation, transportation, and commodity prices. It can also create demand in new categories as consumer and customers respond to the weather effects.
Understanding the potential risks and incorporating adaptive strategies, companies can navigate the challenges posed by El Niño and ensure the resilience of their global sourcing operations.
How can we help
ET2C are a leading Global Sourcing Company, working with our clients for over 20 years to Make Global Sourcing Simple. We have over 250 colleagues based in seven offices across the globe to give you feet on the ground and become your bridge to your sourcing markets.
If you would like to discuss El Nino potential impacts or building a risk mitigation plan please drop us a line at contact@et2cint.com
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Sourcing and Procurement-What’s the difference ?
Interchangeable words or unique, complementary activities that together can unlock superior business performance. As a smaller brand or business without a Procurement or buying team where do you start and do you need both ?
Sourcing and procurement are two related but distinct activities that are essential components of an overarching strategic supply chain management plan.
- Sourcingrefers to the process of identifying potential suppliers and selecting the best among them to provide goods or services to a company. It includes activities such as supplier identification, supplier evaluation, negotiation, and contracting.
- Procurementon the other hand, refers to the process of purchasing goods or services from a supplier. It includes activities such as ordering, invoicing, payment processing, and supplier management.
While sourcing and procurement are distinct activities, they are closely related and often overlap in practice. A strategic sourcing approach can help companies optimize their procurement activities by ensuring that they are working with the best suppliers and getting the best possible prices and terms. Procurement, in turn, is an important part of the sourcing process, as it involves executing contracts and managing supplier relationships to ensure that goods and services are delivered on time, at the right quality, and at the agreed-upon price.
Building a strong Sourcing Strategy and Executing the resultant Procurement Strategy can deliver a range of benefits
- Reducing costs
- Improving Quality
- Improving efficiency
- Managing Risk
- Ensuring Regulatory Compliance
- Speed up innovation
- Improve Customer Experience and Brand Reputation
So where do you start creating your Sourcing Strategy ?
The key to creating, delivering, and benefitting from a strong Sourcing Strategy is to work with a partner who shares and understands your commercial ambitions. In addition, they should have:
- Experience operating in the markets that could be of interest particularly China. Delivering established contacts and factory relationship networks
- Offices established in all product markets to ensure language, time zone and business operating styles are no barrier to delivery
- Experienced colleagues who can support your requirements whether they are for consumable or industrial products
Independent QA teams who can ensure your confidence in the delivery of your products both to specification and to time
At ET2C we have been working with our clients for over 21 years. Acting as our clients bridge to their Strategic Sourcing partners. Creating and delivering Strategic Sourcing plans, including independent on the ground QA.
Working with Start Ups and E-Commerce companies to accelerate their competitive advantage, delivering quality and compliance. We have over 250 colleagues based in seven countries to give you feet on the ground to ensure your Sourcing plans are delivered effectively.
If you have any questions or would like to explore how you could benefit from our experience please drop us a call at contact@et2cint.com
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Turkey: A Powerful Export Market for Global Sourcing and Strategic Sourcing plans
Strategic Sourcing plans should consider the opportunities offered by Turkey. As Sourcing and Procurement teams explore opportunities to shorten supply chains, look for alternative suppliers or find new fast growing potential markets to work with Turkey should be part of their thinking.
Many companies are already seeing the positive benefits Turkey can offer them as Turkey’s exports gain pace. Turkish Export growth has seen three consecutive months of year on year growth. As demand and supply sides build to support deliver to challenges fuelled by
- Several years of turmoil and global trade impacts
- Reactions to the ongoing war in Ukraine
- A wider desire to reduce China exposure in Supply chains
- Rick and ESG benefits derived from moving some supply chain elements to Turkey
What can Turkey offer Sourcing and Procurement teams ? Why should it be considered as a core part of any Global Sourcing Strategy.
Turkey as a strategic sourcing destination can deliver a range of structural and economic benefits making doing business smooth and seamless.
- Geographical location: Turkey’s strategic location makes it a gateway between Europe and Asia, providing easy access to markets in both regions. It also offers access to major shipping routes, making it an ideal hub for international trade. The ability to rapidly visit suppliers without Visa restrictions is extremely valuable to many companies saving time and complex travel arrangements. Making building strong supplier relationships easier.
- Competitive pricing: Turkey’s lower labour and manufacturing costs, combined with its highly skilled workforce, make it an attractive option for sourcing products at competitive prices.
- High-quality products: Turkey has a long tradition of producing both a diverse range of products of very high-quality. Building on their traditional strengths in Textiles, Timber, Fruit and Spices to include more HI Tech industries
5. Trade agreements: Turkey has trade agreements with many countries, including the European Union, making it easier for buyers to source products and conduct business with Turkish manufacturers.
6. Ease of doing business: Turkey has made significant improvements in its business environment in recent years, including streamlining bureaucracy, reducing regulations, and improving the ease of doing business.
Turkey has a diverse range of exports but some of its biggest exports include:
1. Automotive parts: Turkey is a major producer of automotive parts, with exports worth over $20 billion in 2020. The country is home to several large automotive manufacturers and suppliers, and its high-quality parts are in demand worldwide.
2. Textiles: Turkey is one of the world’s leading textile producers and exporters, with exports worth over $10 billion in 2020. The country is known for its high-quality cotton and textile products, including clothing, fabrics, and home textiles.
3. Machinery: Turkey is a significant exporter of machinery and equipment, with exports worth over $9 billion in 2020. The country produces a range of machinery, including industrial equipment, agricultural machinery, and construction machinery.
4. Chemicals: Turkey is a major producer of chemicals, including petrochemicals, plastics, and pharmaceuticals, with exports worth over $8 billion in 2020. The country’s chemical industry is well-established and highly competitive.
5. Food products: Turkey is a major producer and exporter of food products, including fruits, vegetables, nuts, and processed foods. Exports of food products were worth over $7 billion in 2020.
Turkey’s biggest exports reflect the country’s diverse economy and its strengths in manufacturing, textiles, and agriculture. Alongside their traditional market strengths Turkey is fast building strong positions in several other markets.
1. Defense industry products: Turkey has seen significant growth in its defense industry exports, particularly in the Middle East and North Africa regions. The country’s defense exports have grown by over 20% annually in recent years, with total exports reaching $3.2 billion in 2020.
2. Electrical machinery and equipment: Turkey has seen strong growth in its exports of electrical machinery and equipment, which have grown by over 10% annually in recent years. Total exports in this category were worth $18 billion in 2020.
3. Medical devices: Turkey’s exports of medical devices have grown rapidly in recent years, driven by the country’s strong healthcare industry and growing demand for healthcare products. Exports of medical devices were worth $2.8 billion in 2020.
4. Iron and steel: Turkey is a major producer of iron and steel, and its exports in this category have grown by over 10% annually in recent years. Total exports of iron and steel were worth $14 billion in 2020.
5. Plastics: Turkey’s exports of plastics have also seen strong growth in recent years, driven by demand from Europe and the Middle East. Exports of plastics were worth $5.6 billion in 2020.
ET2C Is a global sourcing company with over twenty years’ experience working with our clients to deliver their Sourcing Strategies. Our offices in seven countries, including Izmir Turkey, ensure you always have a team on the ground to be your bridge to your Offshore suppliers.
Giving you independent feet on the ground and confidence with fast responses, removing time zone and language challenges.
If you would like to explore sourcing opportunities within Turkey or to discuss your future supply chain challenges.
Please contact us at contact@et2cint.com
Turkey: A Powerful Export Market for Global Sourcing and Strategic Sourcing plans Read More »
