In talking with a number of experts on global sourcing over the past year, SCDigest has compiled a list of symptoms that may indicate your global sourcing strategy and execution needs a tune-up.

• Executives and managers cannot quickly identify the real strategy behind a global sourcing initiative, which feels more tactical and reactionary rather than strategic.
• Many of the nominal savings on a per unit basis from global sourcing are, in reality, lost when true overall logistics and supply chain costs are accurately considered.
• Decreases per unit costs come at the price of substantial increases in inventory, as inventory buffers and inventory obsolescence increase significantly as a result of the longer and more uncertain lead times.
• Expediting charges to get goods from overseas in time to meet production and distribution requirements increase substantially.
• Company incurs consistent quality problems that result in re-work or the need to return product to offshore vendors.
• Sales opportunities are lost due to failure of offshore goods to arrive on time.
• Overhead costs associated with global sourcing operations and staff rise substantially, with no real benchmarks for comparison.
• A company consistently misses budgeted financials due to a mismatch between expected total landed costs and actual costs.
• Most global sourcing process and handle manually, with minimal technology support, and staff has an increasingly difficult time keeping up.
• A company cannot accurately reflect its true financial exposure due to hidden purchase commitments through international suppliers.

These are just a few of the signs that a company needs to re-assess its approach to global sourcing and bring in some outside help, as needed, to get in gear.

What would you add to our list of global sourcing operational warning signs? Have most companies moved past these early stage problems, or are many still suffering from these types of challenges? Let us know your thoughts at the Feedback button below.