Asia & Global Sourcing Revolution: Diversify Your Sourcing with Buying Offices in Emerging Markets
Looking to source and procure products beyond China? Explore the potential of Southeast Asia’s emerging sourcing markets by establishing buying offices in market for a more effective, agile and resilient supply chain.
The winds of change are blowing through global supply chains. The once-dominant position of China as the world’s manufacturing hub is facing increasing scrutiny. Companies are re-evaluating their global sourcing strategies, with a growing emphasis on diversification, risk mitigation, reduced shipping times and environmental impacts.
This blog post delves into the reasons behind this shift and explores how buying offices can navigate the complexities of spreading their sourcing base across different countries.
ET2C International Unique Buying Office Model
ET2C International have over 23 years’ experience as Global Sourcing Experts. Our 200 colleagues are based in 7 offices across developed and emerging Asian sourcing markets to be your feet on the round. Creating your bridge to your Asian supply partners.
Many of our clients have developed their dedicated Asian buying offices with us. Taking advantage of our unique model that mitigates all the risk of establishing a dedicated team whilst releasing all the benefits of a team on the ground and direct supply relationships. Removing the challenges of office space, recruitment, staff isolation, HR, Payroll and Legal in a simple solution. Our teams can rapidly establish dedicated teams in China, India, Vietnam and Turkey to rapidly take your Global Sourcing to the next level. Buying Office Model
To find our more about our unique Asian Buying office model drop us a line at contact@et2cint.com
Why Diversification is Becoming the New Mantra for Global Sourcing and Procurement teams
Beyond Cost:
While China has historically offered significant cost advantages, factors like rising labour costs, trade tensions including tariff wars and WTO disputes are prompting companies to look beyond the bottom line.
Supply Chain Resilience: The COVID-19 pandemic exposed the vulnerabilities of over-reliance on a single source and Just in time supply chains. Companies are now prioritizing supply chain resilience, seeking to spread their sourcing risk across multiple countries. Reducing shipping times and building closer partnerships between company and supplier.
Geopolitical Instability: Rising geopolitical tensions and potential trade wars are influencing global sourcing strategies. Companies are seeking to mitigate risks associated with dependence on a single region. Post Pandemic disputes lodged with WTO have increased dramatically creating further pressures on the previously smooth-running global trade network
Consumer Preferences: Consumers are increasingly concerned about ethical sourcing practices, environmental sustainability, and product quality. Diversification can help companies address these concerns by sourcing from countries with strong ethical and environmental regulations. Reducing corporate and product risk and measuring and reporting on environmental impacts.
Benefits for Sourcing and Procurement teams of Diversifying Sourcing Locations
Reduced Risk: Spreading your sourcing base minimizes the disruption caused by unforeseen events in a single country. Natural disasters, labour strikes, or political instability can have a lesser impact on your overall supply chain.
Improved Negotiation Power: By sourcing from multiple countries, you gain leverage in negotiations with suppliers. Increased competition among suppliers can translate to better pricing and contract terms.
Access to New Markets: Diversifying can open doors to new markets with specific skillsets or resources. This allows you to tap into a wider range of supplier expertise and potentially source unique products.
Enhanced Innovation: Exposure to diverse manufacturing environments and cultural perspectives can foster innovation. Close collaboration with suppliers in different countries through a dedicated local team can develop new ideas and product development opportunities.
Improved Brand Perception: Demonstrating a commitment to responsible sourcing by diversifying across countries with strong ethical and environmental standards can positively impact your brand image whilst reducing the potential for corporate reputational risk.
Challenges of rapidly establishing a dedicated sourcing and procurement team in new markets
Increased Complexity: Managing a geographically dispersed supply chain requires more complex logistics, communication, and quality control measures.
Hidden Costs: Setting up operations in new countries may involve initial costs for establishing relationships with suppliers, navigating regulations, and adapting to different business cultures.
Quality Control Challenges: Maintaining consistent quality across multiple suppliers in different countries requires robust quality control processes and a strong local presence.
Longer Lead Times: Managing logistics across different countries can potentially lead to longer lead times, requiring careful planning and inventory management.
Cultural Differences: Communication and collaboration can be more challenging due to cultural differences, language barriers, and varying business practices across countries.
How Buying Offices Can Facilitate Diversification: Whilst delivering Commercial Competitive advantage benefits
- Market Research and Supplier Identification:
Buying offices can conduct in-depth research to identify potential sourcing locations that align with your company’s needs and values. They can leverage their local expertise to source reliable and ethical suppliers in different countries.
- Supplier Qualification and Negotiation:
Experienced buying offices can evaluate potential suppliers based on factors like quality, capacity, pricing, and adherence to your ethical sourcing standards. They can negotiate competitive contracts and manage supplier relationships in the local language.
- Quality Control and Compliance:
Maintaining consistent quality is crucial. Buying offices can conduct on-site inspections at your suppliers’ facilities, ensuring adherence to your quality standards and relevant regulations. They can also assist with navigating customs procedures and import/export regulations.
- Logistics Management:
Efficient logistics are essential for a diversified supply chain. Buying offices can manage freight forwarding, customs clearance, and ensure timely delivery of goods from various countries.
- Cultural Bridge and Communication:
Cultural sensitivity is key. Buying offices can bridge the cultural gap between your company and your suppliers in different countries, facilitating smooth communication and fostering productive working relationships. …
Unlocking Asian Sourcing: Benefits, Risks & Why a Buying Office could work for you
The Growth and Development of sourcing in Asian and China
The allure of Asia’s vast manufacturing base, skilled workforce, and cost-competitiveness has prompted many European and North American companies to explore sourcing opportunities in the region. Global Sourcing from China or wider Asians markets has always been a source of huge competitive advantage for companies in many industries.
From start-ups to multinational organisations building Supply Chain to encompass offshoring has been a corner stone of margin delivery and competitive advantage. However, as more companies start to recognise and develop their Asian sourcing or Global sourcing strategies. The immediate first stage benefits are beginning to be degraded removing some of the early mover advantages.
Establishing a Buying Office in Asia can be a strategic move to enhance Sourcing Capability
Establishing a team in market can deliver significant advantages over working through an agent or trying to manage relationships directly from Head Office.
Whilst the Advantages can be huge the challenges of office space, recruitment, HR and Legal in a new country or jurisdiction can seem insurmountable and full of complexity.
ET2C International Unique Buying Office Model
ET2C International have over 23 years’ experience as Global Sourcing Experts. Our 200 colleagues are based in 7 offices across developed and emerging Asian sourcing markets to be your feet on the round. Creating your bridge to your Asian supply partners.
Many of our clients have developed their Asian buying offices with us. Taking advantage of our unique model that mitigates all the risk of establishing a new entity whilst releasing all the benefits of a team on the ground and direct supply relationships. Removing the challenges of office space, recruitment, staff isolation, HR, Payroll and Legal in a simple solution. Our teams can rapidly establish Buying Office teams in China, India, Vietnam and Turkey to rapidly take your Global Sourcing to the next level. Buying Office Model
To find our more about our unique Asian Buying office model drop us a line at contact@et2cint.com
The Advantages of Establishing a Buying Office in Asia:
The balance of benefits will be dependent on your current sourcing and procurement model.
- Cost Reduction: A key advantage is the potential for significant cost savings. Asian countries often offer lower labour costs, raw material prices, and production overheads compared to Europe and North America.
- Enhanced Quality Control: A local presence allows for closer collaboration with suppliers, facilitating improved quality control measures throughout the production process. Regular on-site inspections and communication can minimize defects and ensure adherence to quality standards.
- Efficient Sourcing & Negotiation: A dedicated buying office can identify new suppliers, negotiate better pricing based on local market knowledge, and manage sourcing activities efficiently.
- Improved Speed to Market: Having a local team facilitates faster communication and quicker response times with suppliers. This can lead to shorter lead times and faster product introductions in your markets.
- Supply Chain Visibility & Management: A buying office can provide real-time information on production progress, inventory levels, and potential disruptions within the supply chain. This allows for proactive management and mitigation of risks.
- Regulatory Compliance: Navigating the complexities of Asian regulations can be daunting. A local team can ensure compliance with product safety standards, import/export regulations, and labor laws.
- Cultural Understanding & Communication: An Asian buying office fosters better cultural understanding between the company and its suppliers. This bridges communication gaps, avoids misunderstandings, and strengthens business relationships.
- Direct Access to Asian Markets: A physical presence allows companies to explore opportunities for selling their own products within the Asian market itself, potentially creating a new revenue stream.
The benefits can be huge and wide ranging in establishing your team on the ground. The Risks are the factors holding back many companies from releasing the Operational benefits. Mitigation of these is crucial to effective implementation.
Risks to be Mitigated in establishing a Buying Office in Asia:
- Investment: Establishing a buying office requires an initial investment in setting up the office space, hiring staff, and legal compliance. Simply finding office space of the right standard can require significant time and market knowledge.
- Skill Sets: Many organisations do not have the current capability to navigate employment law, practises and legality in a new jurisdiction.
- Cultural Differences & Language Barriers: Cultural differences and language barriers can lead to communication difficulties, misunderstandings, and potential delays in operations.
- Labor Regulations & Ethical Sourcing: Navigating complex labor laws and ensuring ethical sourcing practices can be challenging for companies unfamiliar with the Asian landscape.
- Distance & Time Zone Differences: Managing a team across a significant time zone difference can pose communication and operational challenges This can build a feeling of isolation and remoteness in working reducing effectiveness.
ET2C International Unique Buying Office Model-What are the Benefits
- Local Expertise & Knowledge: Setting up a buying office requires navigating complex legal, cultural, and business environments. Companies often lack the in-depth knowledge and experience to navigate these challenges effectively. Our 23 years experience and teams on the ground in China and other Asian Sourcing markets enable us to rapidly deliver:
- Office space: Our modern office facilities ensure great working environment and the ability for your teams to network with other Buying teams within the same building. Sharing knowledge and building Insights
- Recruiting & HR: We manage all your recruitment with you to find qualified local staff, managing payroll, and adhering to labour regulations.
- Supplier Identification & Negotiation: Identifying reliable suppliers, negotiating competitive pricing, and managing vendor relationships.
- Quality Control & Inspection: Providing quality control support and overseeing production processes.
2. Faster Start-Up Time: Companies can leverage our existing infrastructure and resources, leading to the quicker establishment of their buying office and streamlined operations.
The benefits of setting up your Asian Buying Office
Moving your Global Sourcing Strategy to one with Buying Office established moves your delivery to the next level. Improving operating margins, developing faster innovation, improving quality and supplier relationships. When establishing your new office risk mitigation is crucial to ensure rapid margin and trading improvements.
Buying Office Model has been delivering benefits to our clients for over 10 years. Mitigating all the risk of setting up a team in Asian to allow them to focus completely on delivering the benefits to operating margins. To find out more about how this could elevate your Global Sourcing drop us a line contact@et2cint.com
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Summer Davos 2024: Cooperation in a Turbulent Global Trading World
The 15th Annual Meeting of the New Champions, also known as Summer Davos 2024, concluded in Dalian, China, on June 27th, 2024. Held under the theme “Next Frontiers for Growth,” the forum brought together over 1,700 participants from nearly 80 countries and regions. This year’s event was particularly significant, taking place amidst global economic uncertainty and a renewed focus on climate action.
Key Outcomes and Deliverables: Fostering Trust, Driving Sustainability
Summer Davos 2024 yielded several noteworthy outcomes that promise to impact global progress on various fronts. These include:
- China’s Economic Growth and Future Trajectory: Chinese Premier Li Qiang addressed the forum, highlighting China’s economic growth exceeding expectations at 5.3% in Q1 2024. However, discussions acknowledged the need for a more sustainable and innovative model for long-term growth. This focus on responsible development within China’s vast market has implications for global sourcing companies. As China prioritizes environmental sustainability and green practices, global sourcing may shift towards ethically produced goods with a lower environmental footprint.
- Expansion of the First Movers Coalition: This initiative, launched at COP26, aims to create a market for clean energy technologies. Summer Davos witnessed its expansion to nearly 100 companies, including giants like IKEA and Maersk. This signifies a growing international commitment to accelerating the development and adoption of clean technologies. This expansion could lead to increased demand for clean energy solutions from a wider range of global sourcing companies, potentially impacting supply chains and trade flows.
- Progress on the 1t.org Platform: This ambitious platform aims to conserve, restore, and grow one trillion trees by 2030. At Summer Davos, over 100 companies pledged to plant 12 billion trees, a significant step towards achieving the platform’s goal. Increased collaboration on reforestation efforts could create new opportunities for global sourcing companies specializing in sustainable forestry practices and related technologies.
- Launch of the Network to Mobilize Clean Energy Investment for the Global South: This critical initiative aims to connect developing economies with resources and expertise for their energy transition. Developed nations and global sourcing companies can leverage this network to increase clean energy investments in the Global South. This can lead to the creation of new markets for clean energy technologies, fostering sustainable development and potentially creating new sourcing opportunities for ethically produced goods from these regions.
- Mental Health in Cities: Experts identified 37 characteristics of a “mental health-friendly city.” These insights can guide urban planning and policy decisions around the world, contributing to the well-being of citizens and potentially improving overall productivity within global sourcing hubs.
Impact on Global Sourcing and Procurement
The outcomes of Summer Davos 2024 have the potential to influence global trade in several ways:
- Shift Towards Green Practices: The forum’s emphasis on sustainability and clean energy initiatives could lead to a rise in demand for environmentally friendly products and technologies, reshaping global trade patterns and impacting the sourcing strategies of companies worldwide.
- Focus on Innovation: China’s pledge to prioritize innovation paves the way for new industries and technologies with global trade implications. This could lead to new sourcing opportunities for innovative products and solutions.
- Investment Opportunities: The Network to Mobilize Clean Energy
ET2C International Global Sourcing Experts
The ET2C International is a UK managed Global Sourcing company with over 22 years trading experience. Our 200 colleagues are based in offices in 7 countries across Asian and emerging markets from China to India to Turkey. Ensuring we are always well placed to support our clients strategic sourcing and procurement challenges. ET2C Corporate Profile
The latest Summer Davos shows the both the challenges in Global Trading and Supply but also the growth of Sustainability as a key plank of Sourcing Strategies.
If you would like to know more about how you can improve Sustainability in your Sourcing Strategy or to discuss emerging supply markets please drop us a line contact@et2cint.com
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Mastering Tomorrow: Unraveling the Art of Global Supply Chain Forecasting
In the fast-paced environment of modern business world, one strategic tool emerges as a beacon of foresight—supply chain forecasting. Supply chain forecasting has a pivotal role where predicting demand, anticipating risks, and navigating volatile markets is harder than ever. In todays world of Global Sourcing and Procurement Supply chain forecasting uses a blend of art and science, intuition and data-driven insights, to guide procurement, production, and logistics decisions. But with ever-evolving consumer preferences, unpredictable disruptions, and geopolitical uncertainties, getting it right is no easy.
Understanding the Essence of Global Supply Chain Forecasting
Supply chain forecasting is the strategic process of predicting future demand for products or services based on a combination of historical data, market analysis, and contextual factors. It acts as the compass guiding supply chain professionals, offering a glimpse into the future to inform decisions related to production, inventory, and distribution.
The Strategic Significance of Accurate Forecasting-Improving business performance
- Optimized Inventory Management:Accurate forecasts empower businesses to strike the delicate balance in inventory levels, preventing the pitfalls of surplus stock or stockouts. This not only minimizes holding costs but ensures products are readily available to meet customer demands.
- Customer Satisfaction: Precise forecasting translates into satisfied customers. By aligning supply with demand, businesses can fulfill orders promptly, enhance customer experience, and build brand loyalty.
- Operational Efficiency:Efficient supply chain forecasting is the linchpin of operational excellence. It facilitates streamlined processes, resource optimization, and a reduction in unnecessary operational costs.
- Strategic Planning:Armed with reliable forecasts, businesses can make informed strategic decisions. Whether expanding operations, entering new markets, or introducing new products, accurate forecasting is the compass that guides effective planning.
Navigating the Challenges of Global Supply Chain Forecasting
- Volatility and Uncertainty: Rapid changes in market conditions, unexpected disruptions, and fluctuating consumer preferences contribute to the ever-present challenge of forecasting in an environment characterized by volatility.
- Data Quality and Accessibility: The accuracy of forecasts hinges on the quality and accessibility of data. Incomplete or inaccurate data poses a significant obstacle to achieving reliable predictions.
- Short Product Lifecycles: Industries with rapidly evolving product lifecycles, such as technology and fashion, face the challenge of forecasting accurately within a condensed timeframe.
Strategies for Success in Supply Chain Forecasting
- Advanced Analytics and Technology:Embrace cutting-edge analytics and forecasting tools, leveraging the power of artificial intelligence and machine learning to extract actionable insights from vast datasets.
- Collaborative Ecosystems: Foster collaboration across the entire supply chain ecosystem. Establishing transparent communication channels with suppliers, manufacturers, and distributors enhances the accuracy of forecasting models.
- Scenario Planning: Anticipate various scenarios and conduct scenario planning to prepare for a spectrum of potential outcomes, allowing for agile adjustments as conditions evolve.
- Continuous Monitoring and Adjustment: Regularly monitor actual performance against forecasts and be prepared to adjust strategies in response to changing market conditions.
- Feedback Loops:Establish feedback loops to gather real-time insights from sales data, customer feedback, and market intelligence, enriching forecasting models with dynamic information.
Effective Implementation, the Tools are Great, But…
Technology is undoubtedly powerful, but human expertise remains a vital ingredient in supply chain forecasting. Interpretive judgment, understanding of market nuances, and agility in adapting to unforeseen circumstances are all crucial for extracting real value from data and algorithms.
ET2C International is an Expert in Supply Chain
ET2C International has for over twenty years played a crucial role connecting global brands and companies with sourcing partners. Our expertise in global sourcing and supply chain can make sure you get all the benefits of sourcing from China and Asia without any of the risks.
Our 250 colleagues are based in offices in seven key Asian sourcing markets to make your global sourcing simpler. Where language, time zone or business communication practices can make things difficult, our team will be your bridge to your suppliers.
Our team of experts can help you in making accurate supply chain forecasting. Giving you independent feet on the ground and confidence with fast responses, removing time zone and language challenges.
The Forecast of the Future, how will Supply Chain Forecasting Develop
As technology and data analysis evolve, supply chain forecasting will become even more sophisticated and integrated. Expect real-time insights, hyper-connectivity, and predictive analytics to drive even more effective decision-making. Through embracing advanced technologies, cultivating collaboration, and adopting a mindset of continuous improvement, businesses can not only meet the challenges of today but also pioneer the future with confidence. Supply chain forecasting becomes the beacon illuminating the path to resilience, efficiency, and success in the ever-evolving landscape of commerce.
Join us in unraveling the art of supply chain forecasting—where foresight transforms challenges into opportunities, and businesses master tomorrow with confidence. Contact with us at If you would like to discuss how we can help you in your forecast, please contact@et2cint.com
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Is Nearshoring the Answer to Disrupted Supply Chains?
The plan to near shore supply chains has been talked about since the pandemics first waves struck global supply chain networks fragmenting the previous structures and organisation. The immediate impact was a desire and corporate focus to develop shorter supply routes, rebuild partnerships and build more resilience by removing distance.
The immediate rush and to redevelop Global Sourcing Strategies, shorten supply routes and ‘Near Shore” is not being delivered. As the simple ideal of moving sourcing markets is proving much tougher to achieve than anticipated for Sourcing and Procurement teams.
Global Supply China shocks fuelling the drive to near Shore
The aftershocks to global trade and supply chains after the Pandemic have been many and unexpected regularly buffeting the smooth winds of commerce:
- Ukraine War
- Pandemic recover
- US – China Trade conflicts and Tariff increases
- WTO disputes
- Weather impacts from El Nino and droughts in major rivers and canals
ET2C International Global Sourcing and Strategy Experts
ET2C are a UK owned Global Sourcing company with over 22 years experience in making sourcing simpler for our clients. Our 200 colleagues are based in 7 major and emerging sourcing markets to ensure they can be your bridge to your supply chain partners. We work with clients from Early stage start-ups and challenger brands to global retailers to ensure their sourcing and procurement is as effective as possible. https://et2c.com
The growing desire to Near Shore or Friendly Shore Supply routes
The background to the rush to Near or Friendly shoring has been the nearly five years of open economic conflict between the US and China. US-China trade flows hit an all-time record of $690.6 billion in 2022. Connecting the countries by a larger movement of trade than any other Nations (without shared borders).
Suggesting that Globalisation is not showing signs of halting. DHL in their recent report suggest that the US-China trade relationship is beginning to show a “general pattern” of decoupling even as globalization more broadly remains resilient, according to DHL’s global connectedness index.
“International flows have proven remarkably resilient through recent crises, and they strongly rebut the notion that globalization has given way to deglobalization,” according to the report, produced with New York University’s Stern School of Business.
“Today’s threats to globalization, nonetheless, are real and demand serious attention,” it continued. “It would be a mistake to infer from the recent resilience of international flows that globalization cannot go into reverse.” What has been the real world experience of brands and companies looking to Near Shore as part of their Sourcing Strategy ?
US Apparel Companies Can’t See a Future Without China
Brands are finding few factories outside the country that can produce the quality and quantity they require.
When Lanny Smith founded Actively Black Inc. in 2020, he hired factories in China to produce the brand’s athletic wear. But last year, concerned about production delays caused by China’s Covid lockdowns, Smith explored buying elsewhere. He shipped samples to a supply chain agent who’d assured him there were alternatives in Latin America. “He hit me back the next day and said, ‘You’re not going to find anybody who can do this in the Western Hemisphere,’” says Smith, 38, a former basketball star at the University of Houston.
The challenge of delivering a China +1 or Near Shoring Strategy
For many companies buying from China has become more challenging in recent years because of increased tariffs, snarled supply chains, factory shutdowns under Beijing’s Covid Zero policy and rising geopolitical tensions. Factors which have combined to make
many Companies and brand owners investigate changing their Sourcing Strategy to be China +1 or to seek to replace China completely. Whilst on the face of it the idea has a lot of merit and upside finding suppliers who can match China for quality and price is not so simple.
Quitting China as a sourcing partner isn’t easy, and most progress has been concentrated in industries such as semiconductors that are considered vital to national security or have high added value. Producers of lower- tech, lower-margin and less added value products such as clothing, shoes, housewares and luggage are finding that few factories outside China have the machinery or the skilled workforce to deliver the quality and specifications required.
China-The worlds Premier destination for Manufacturing
Since the 1990s, China has spent hundreds of billions of dollars transforming itself into the world’s premier location for manufacturing. Its factories have the machinery and expertise needed to produce quality products at a volume and pace that’s difficult to match. Along the 80-mile stretch from Shenzhen to Guangzhou, companies can weave, dye, sew, trim, label and package anything from T-shirts to tuxedos. And China’s investment in highways, railroads, air hubs and seaports has created a smooth path from factory gate to consumers worldwide.
Twenty years of Global Trading growth between China and the World is not something that can be dismantled quickly and easily. China’s advantages as a sourcing destination are so great that many companies that have tried to move away have returned at least a
portion of their production there. Even moving away from the Chinese mainland cannot guarantee moving away from China. As China has expanded its influence, support for infrastructure and factory investment to other countries such as Ethiopia.
When companies move manufacturing out of China, they often end up working with Chinese- owned suppliers or sourcing components and materials from the country.
Sourcing and Procurement Strategy-Is Near Shoring always the right answer?
Sourcing strategies are not always quick and easy to implement, the initial idea to relocate manufacturing from China to other Asian or African markets can suggest instant benefits. China’s experience of supplying and shipping products around the World is difficult to replicate. For some markets this may well require more product side compromises to deliver the geographic move.
ET2C International Global Sourcing Strategies
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 Off Shore suppliers.
If you would like to explore Sourcing Strategy options or opportunities within China or in addition to China or to discuss your future challenges.
Please contact us at contact@et2cint.com
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Navigating Global Sourcing 2.0: Challenges and Strategies for Procurement Teams
Navigating Global Sourcing 2.0: Challenges and Strategies for Procurement Teams
What is Global Sourcing 2.0
Global Sourcing 2.0 will define the response of Procurement and Sourcing Teams to another year of volatility in global trade. The range of impacts to the smooth running of global trade continue to build. Inflationary pressures continue to impact margin growth and the business need for Environmental and Supply Chain Risk management gains momentum. The risk of a protracted trade war using tariffs as the weapon of choice starts to loom large as elections take place in many countries. Most importantly the US presidential race which has already initiated companies’ scenario planning for a very different trade environment. The ongoing conflict in Ukraine and the Middle East are continuing to create huge challenges for Sourcing and Procurement Teams.
Procurement and Sourcing Team leaders who had hoped that economic conditions in 2024 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
ET2C International Global Sourcing Experts for twenty years
ET2C International are a UK owned leading Global Sourcing Company. Over twenty two years trading history playing a crucial role connecting global brands and companies with sourcing partners, delivering Strategic Sourcing projects and working with clients on our unique buying office delivery model.
Our 250 colleagues are based in offices in seven key Asian sourcing markets (developed and emerging markets) with the sole mission to make your global sourcing simpler. Where language, time zone or business communication practices can make things difficult, our team will be your bridge to your suppliers.
At ET2C our history of delivering the benefits of global sourcing to our clients enables businesses to quickly and easily connect with factory partners who can deliver your product requirements, quality and compliance requirements and margin improvements.
Macroeconomic conditions straining procurement.
Understandably, the aggregate effect of these challenges has overwhelmed many procurement functions. Procurement can play a critical role in solving today’s most pressing business problems, but it cannot do so on its own. Winning now requires an entirely new level of resilience improvement and value creation built through a coordinated enterprise-wide effort.
Global Sourcing in 2024 requires Sourcing & Procurement teams at the heart of business in an expanded mission.
Sourcing and Procurement is increasingly delivering a wider remit in business.
-Protecting against Corporate margin erosion
-Deliver on Environmental and Social Risk in Supply Chain
-Build Resilience against the next Black Swan event
Accordingly, success in protecting margins, containing cost escalation, and dynamically capturing opportunities requires an expanded mission for the procurement function. CEOs should consider positioning their procurement leaders at the center of the company’s response to the current context, tasked with a clear mandate to protect margins. CPOs can then mobilize executives for cross-functional impact and escalate investments in the talent and systems required to achieve and sustain outperformance.
Visibility-Measurement-Action-Reduction delivering a Global Sourcing Action Plan
Ten Actions to build resilience in Global Sourcing and Procurement
Procurement leaders can combat volatility, inflation, and shortages and build resilience by taking ten core actions. The first critical element required is to gain transparency over the pressures and change drivers in their supply chain. Only be creating true visibility can they start to identify the key decisions required to deliver high level objectives. This will require support from all functions across the business and external partners to support Procurement in developing a more agile approach.
Risk Assessment of Supplier Network and Wider Value Chain
- Suppliers. What vulnerabilities—including financial, fulfilment, reputational, and environmental—do suppliers face?
- Supply. How are events affecting the end-to-end value chain? Which categories may be hard to secure in the foreseeable future?
- Cost. How are suppliers’ costs of goods sold (COGS) trending? Can we quantify the inflation or deflation they face? What do the results mean for our company’s P&L?
- Environmental. How are Key Suppliers measuring their Environmental impact and taking active measurable and visible steps to reduce as part of wider range of commitments.
- Social, How is the Supply network mapped Globally against potential Social risks and are key suppliers.
Building New Skill Sets to Deliver an Expanded Mission for Procurement
As Procurement leaders wrestle with the new challenges of Global Sourcing 2.0 the need for a new range of additional skills becomes a critical need for effective delivery.
As Sourcing and Procurement teams play a more central role in business delivering their expanded contribution. The need to rapidly build skills will become a critical enabler to deliver their New Mission.
- Delivering a visible assessment of high level risk, across the entire supply chain
- Identifying Environmental impacts, particularly Emissions generated within Supply base
- Minimising impact on Key suppliers at potential risk of audit fatigue
- Building working Partnerships
Global Sourcing 2.0 represents a shift in priority and ways of working. From the old Procurement model of expecting Suppliers to make and supply to a forecast and at the cheapest possible price.
To one where there is a more collaborative approach to Sourcing Strategy based on visible shared data, shared Environmental and Social
commitments and strong partnership for growth. A shared vision of the future that can inform the future requirements.
We have long argued that an approach based on strong partnerships is a more successful Sourcing model than the focus on Cost and make to Forecast.
Implementing Global Sourcing 2.0
As more companies move to re structure the deliverables of the Sourcing & Procurement team mission. Core competencies and skill sets need to be created, adopted and utilised.
Sourcing teams will need to rapidly build or bring in the skills required to bring full risk and impact visibility to their supply chain.
ET2C are a leading global sourcing company, with over twenty years’ experience supporting our clients to develop and deliver their sourcing strategies. We have seen a big rise in our clients demands for
-Strategic Sourcing Projects and Research
-Emissions measurement and management
-Risk identification
-Quality and Compliance. Social & ethical Auditing
As many companies move rapidly towards a future defined by Global Sourcing 2.0. Drop us a line to see how we could support you in your challenges
Email us at Contact@et2cint.com.
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