TABLE OF CONTENTS September 11, 2001 gave us a whole new insight into how unsafe our borders are and Chapter 9 covered the government's steps to secure our borders. These events definitely added to the complexity of expanding our borders to source materials overseas. The nature of outsourcing and the current strength of the Euro do not allow much opportunity to find lower-cost materials in first-world countries, therefore, our focus tends to be on third-world countries, which often experience instability, corruption, and risk of failure. However, in the right situation, these countries could provide us with the costs savings to drive competitive advantage, boost revenues, and sustain a positive income.
It is this gamble that procurement professionals deal with every day, finding further savings while controlling risk. For those who have worked in the field of global sourcing prior to 9/11, we know that those events tightened things up within our borders, but many of the threats actually existed before that fateful day. This chapter will guide you through the basics of strategic sourcing and go through a step-by-step process for determining your true landed cost, thus allowing you to make a sound and educated business decision as to whether or not to push your activities beyond the domestic arena.
To better assist in understanding strategic sourcing, Nathan Kelley, Senior e-Procurement Specialist for a global professional services and logistics procurement company, draws on his expertise in this field and provides insight into this arena. Kelley begins by...
