In the U.S., global outsourcing began in the 1800s with shipbuilders acquiring sails from Scotland. As global manufacturing capabilities improved and technology advances facilitated more efficient communication and process management, worldwide sourcing became commonplace. Today, global procurement is a multi-billion-dollar enterprise that is expected to more than double by 2025.
The explosion in global outsourcing is occurring for a reason. The benefits of outsourcing are familiar to any organization with a global procurement program underway. In addition to cost savings, typical benefits include a better focus on core business activities, resolving capacity problems and driving transformational change.
Global sourcing also enables companies to take faster advantage of emerging technologies and to develop new products and bring them to market with greater speed and efficiency. In addition, by taking advantage of manufacturing innovation worldwide, companies can often improve the quality of their products by acquiring them overseas — and reducing cost at the same time.
Despite the size and dynamic growth of global outsourcing, a number of myths and misconceptions still keep businesses from exploring and taking advantage of the opportunities. The accompanying infographic, Global Sourcing: Myth Versus Reality, provides quick, visual clarity to help procurement personnel understand the facts and avoid what could be some very costly misconceptions.
Author Bio: Tim Baker is Director of Marketing and Strategic Development at Axia Sourcing, a global sourcing service provider. He has more than 25 years of experience in the industry and focuses on procurement, manufacturing, and distribution.