Strategic Sourcing Opportunities in Bangladesh
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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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Why do I need a Global Sourcing Strategy ?
Global Sourcing Strategy, Asia Sourcing or China Sourcing are terms that are constantly being talked about and searched for online. How do we define them and what are the benefits to your business or brand? Are they purely the remit of huge organisations or can smaller companies derive all the benefits to grow their business?
As a small business or brand start up competition can be tough and relentless. What can immediately help to build your competitive advantage is an effective Sourcing Strategy.The creation and delivery of which can rapidly deliver bottom line benefits as well as superior quality and compliance controls. Building your business profitably and protecting your brand reputation. The cornerstone of your long-term growth.The era of globalisation is still with us, despite the continual turmoil from the Pandemic and the War in Ukraine. Whilst the last few years have been difficult for many the opportunities to build your competitive advantage are still there and as strong as ever.Indeed, in many markets not sourcing from China or Asia and put you at a potential disadvantage.So what should you expect a Sourcing Strategy to deliver to your business?
- Cost savings: By sourcing goods and services from countries where skilled labour and materials costs are lower. Where factories have consistently invested in their capital equipment to ensure their innovation capabilities. Companies can reduce their costs and increase their competitiveness in the global marketplace.
- Access to new markets: Global sourcing can provide access to new markets and new suppliers, which can help companies diversify their supply chain and reduce their dependence on any one supplier or market.
- Increased efficiency: By leveraging the expertise and capabilities of suppliers around the world, companies can increase their efficiency and improve their supply chain performance.
- Improved quality and Compliance: Global sourcing can enable companies to access suppliers with specialised expertise and capabilities, which can help improve the quality and performance of their products.
- Enhanced innovation: Global sourcing can facilitate the transfer of knowledge and best practices between suppliers and companies, which can help foster innovation and drive product and process improvements.
- Risk mitigation: A global sourcing strategy can help companies mitigate supply chain risks by diversifying their supplier base and reducing their exposure to geopolitical, economic, and environmental risks in any one region.
Overall, a global sourcing strategy can help companies increase competitiveness, reduce costs, and improve supply chain performance. However, it also requires careful planning, management, and coordination to ensure that the benefits are realised and the risks are managed effectively.
Potentially the most important decision to make is not whether to build a Strategic Sourcing plan but who to partner with to take those first steps into a new market. Where time zones, languages, communication expectations and ways of doing business maybe very different.
At ET2C we have been working with our clients for over 21 years. Working as our clients bridge to their Strategic Sourcing partners. Creating and delivering Strategic Sourcing plans.
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 message at contact@et2cint.com and see how we could help you build your Global Sourcing Strategy and deliver increased competitive advantage.
Why do I need a Global Sourcing Strategy ? Read More »
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
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Strategic Sourcing from India – The Growing Economic Powerhouse
Strategic Sourcing from India, the high growth economy that should be in your Global Strategic Sourcing plan
With a population of over 1.2 billion, India is the World’s largest democracy, the second most populated country on the planet. It now boosts the World’s 5th Largest Economy WEF
Over the past decade, India’s integration into the Global Economy has been accompanied by similar levels of economic growth. Leading India to emerge as a Global Economic player and a country capable of playing a significant role in any product Sourcing Strategy.
“We believe India is set to surpass Japan and Germany to become the world’s third-largest economy by 2027 and will have the third-largest stock market by the end of this decade,” says Ridham Desai, Morgan Stanley’s Chief Equity
Building on their unique set of competitive advantages provided by:
- Skilled workforce
- Lower cost of labour
- Cultural alignment and compatibility
- Favourable regulatory environment
- Improving infrastructure
- Near-shoring and Re-shoring initiatives to move away from China benefitting India
The Regulatory environment has fuelled the delivery of six mega trends
1.Supply chain diversification
Fuelled by the global turmoil and moves by many companies to find alternative or additional sourcing partners to supplement China. India has benefitted from many companies in USA and Japan relocating supply chain partners to build future shock resilience.
- Key Export Market for India
Industrial components
Textiles
Electronics and EV technology
Manufacturing competitiveness in India has benefitted hugely from skilled work force and lower labour costs allowing highly competitive pricing position v other markets. India steel manufacturing also fuels the competitiveness of the manufacturing sector. The textiles & Apparel markets in addition to the cost and quality of labour India has easy access to high quality raw materials.
EV manufacturing and innovation and India’s ambition to be a Global Hub for EV industry and Technology. India will launch 40 models of EV car models from a range of Car brands. Support for the industry has been further supported by the recently announced the opening of the worlds largest EV hub supporting the manufacture of both vehicles and advanced cells.
3.Government initiatives
The Indian Government continues to strive to create the rights conditions for Export business to flourish. Foreign and domestic investment in manufacturing has increased supporting further output growth.
4.Capex
As many factories reach high levels of utilisation, benefitting from the strong growth in the Indian economy. Investment levels are rising rapidly both from Government and Private enterprise.
5.M&A
Manufacturing companies are using M&A as a way of building scale and adding capabilities to their portfolios and export capability. Deals were $108b in India in 2021 of which 16% were in the Manufacturing sector.
6.PE/VC funding
In the last few year significant investment has flown in India industrial and export sectors. Fuelling growth in the start up Eco System and building transformative growth. The Manufacturing sector benefitted from over 16% of this investment.
Summary Indian Export growth
Indian continues to build its position as a global export powerhouse. Strong infrastructure in pace, continued investment and Government commitment to creating to export growth helps to make India an easy country to do business in.
It has the second largest railway network in the world and a vast coastline with established seaports.
Strategically located nearly 10,000 KM closer to Europe and the USA.
For companies wrestling with the need to evolve their Sourcing Strategies. Starting to look at Off Shoring options or as part of a wider China +1 strategy India should be top of your list of countries to investigate.
Key export areas of
Industrial Components.
Textiles
Electronics particularly EV Technology
Can provide exceptionally high value and innovative products whilst retaining a lower-cost base.
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 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 India or to discuss your future supply chain challenges.
Please contact us at contact@et2cint.com
Strategic Sourcing from India – The Growing Economic Powerhouse Read More »
Challenges for Sourcing Strategies-Global Sourcing 2.0
Global Sourcing 2.0 will define the response of Procurement and Sourcing Teams to another year of volatility. Inflationary pressure continues to build and the business need for Environmental and Supply Chain Risk management gains momentum, creating huge challenges for Sourcing and Procurement Teams.
Procurement and Sourcing Team leaders who had hoped that economic conditions in 2023 would make their jobs easier than last year are already disappointed. As the new year began, the volatility and inflation of the previous year showed no signs of abating
Many of the dimensions of change impacting business in 2023 are likely to still be with us in some form at the outturn of the year. Procurement and Sourcing functions are responding to these wide-ranging challenges in an equally wide range of structural changes and ways of working adaptations. Sourcing teams are facing the New Challenge of Global Sourcing 2.0 …
Challenges for Sourcing Strategies-Global Sourcing 2.0Read More »
Challenges for Sourcing Strategies-Global Sourcing 2.0 Read More »
