2015 Forecast for Global Sourcing

The sheer quantity of savings available through global sourcing has made the supply chain strategy increasingly popular over the past few years.

With big improvements in global communications and data analytics, and with the previously slow recovery from the 2008 financial crisis finally picking up momentum, 2014 witnessed businesses shift from fiercely protecting budgets to carefully investing in relationships with a view to break open new markets.

With 2015 now upon us, economic indicators across the board continue to improve. And yes, that means there’s every good reason to stay ahead of the curve by knowing the global sourcing trends you can expect to see in 2015.

Increased adoption of global sourcing

Although many large businesses (such as key players in the semiconductor industry) have taken advantage of global sourcing and manufacturing for many years now, small to medium enterprises (SME’s) have only caught on more recently.

It’s still a relatively new phenomenon and, as awareness of the considerable savings on offer continues to spread, we can expect to see more businesses take advantage in 2015.

Last year, and as predicted, SME’s began partnering with qualified, experienced global sourcing specialists and used the savings on offer to leverage growth. This year, and with the global economic situation improving, we can expect more of the same.

Greater competition in overseas markets

In developing countries, global sourcing is largely seen as a business opportunity for the West, but naturally the domestic markets benefit, too. This year we can expect to see countries with strong manufacturing backgrounds (such as Japan) set up in South-East Asian countries to tailor to the needs of the West.

Consequently, there will be greater competition in global sourcing locations such as South America and the ASEAN. China is increasingly seeing global sourcing as an investment opportunity and will continue to establish facilities both at home and in other countries with low labour costs such as Africa.

Increased nearshoring

As the US economic recovery continues and fracking legislation promises the country a much needed cash injection, it’s likely we’ll see many US businesses adopting nearshoring strategies to outsource manufacturing operations to countries such as South America.

With increasing amounts of manufacturing done overseas in developing countries, greater global sourcing opportunities could arise.

Big data tools increased transparency and cost tracking

We’re increasingly move into the world of “big data” with ever more readily available cloud computing services capable of serious number crunching. When combined with the inevitable adoption of the so-called “Internet of Everything”, global sourcing will become increasingly easier to manage for suppliers, buyers and logistics companies alike.

With more accurate tracking capabilities, realising the financial benefits from value chains will become easier, making it simpler to justify the move to global sourcing, further exacerbating its increase in popularity.

A maturing sector

All of the above trends culminate in what could be described as a maturing of an industry. Many factors come together to make global sourcing not only more accessible, but more efficient and potentially with even with bigger savings on the table.

If you’d like to learn more about how to stay ahead of your competition by freeing up cash flow  through sourcing globally, contact Mawson Global for a QuickLook Analysis today.

Go East, Entrepreneurs! The Business Impact of Global Sourcing

In a recent Forbes article, the authors give a ringing endorsement of the power of global sourcing for businesses:

“Although the relative cost of manufacturing in China has risen in recent years, the country is still often the cheapest location for American retailers and manufacturers to source goods or parts.”

Many entrepreneurs and small-business owners assume that successful sourcing from China requires opening local offices, hiring staff and making other investments that are impractical below certain revenue levels. However, a global sourcing firm with business expertise, established relationships and the experience to navigate the Chinese business world opens up an entirely new approach to doing business for companies interested in sourcing materials from China.

It’s a major landscape that can be difficult to navigate. All an entrepreneur has to do is visit an online sourcing platform to recognize that hundreds or even thousands of potential vendors in every area are listed. There’s a massive opportunity to identify new sourcing partners. Yet with an online search it’s hard to tell which companies are legitimate, which have the manufacturing capabilities to meet demand, and whether their customers are happy. A knowledgeable sourcing partner can vet potential Chinese suppliers, eliminating stress by developing a short list of potential candidates.

Due diligence requires time, expertise and resources. There are numerous avenues that can be used to connect with suppliers. Entrepreneurs need to begin with some understanding of the Chinese market. When evaluating individual suppliers, it’s important to understand the company, its management team, its products, quality assurance programs, production capabilities, credit and financial terms and other components of how they do business. Chinese language skills and the ability to navigate Chinese business regulations and culture are helpful to this process. A local presence for site visits and face-to-face meetings is also important. An established sourcing partner can conduct due diligence and provide answers to all the questions that arise.

Accelerate progress by partnering with a sourcing partner. It’s easy to become overwhelmed with thoughts on visiting trade shows, reviewing audited financial statements, making site visits to plants and negotiating terms. But sourcing from China can provide a significant competitive advantage for any company and immediately impact a company’s bottom line … provided the company partners with the right firm. Working with an establishing global sourcing expert, like Mawson Global, allows companies all the benefits of a Chinese supplier while dramatically minimizing stress, travel and costs. Sourcing partners can manage the process end-to-end while communicating regularly throughout the process.

Are you ready to explore the advantages that working with a Chinese supplier could bring to your business? Contact Mawson Global today to discuss your company’s specific needs and learn more about how our Asia team’s global perspective and local expertise can work for you.