An important question that every emerging business owner in the west is faced with is how to cut down on production expenses. We come across various struggling business houses who are failing to cope up with rising labor costs, and also paying high rates for energy and raw materials. But there has been a way out of such circumstances and that is global sourcing. It involves gaining alternative supply and production sources that can fulfill the demands of first world businesses. While sourcing is a popular activity that offers significant results, there are businesses who choose to invest in low cost production methods. Let us take a look at the key motivations between sourcing and procurement – A Brief Look Into Global Sourcing Finished products can be purchased readily from online portals or through designated agencies. The focus is on saving purchasing costs and eliminating production challenges. Sourcing companies work with businesses across various industry verticals to find the most profitable low cost opportunities. It reduces dependence on self production provided that available finished goods are up to required quality standards. By sourcing different parts across profitable marketplaces, the production costs are lowered effectively. Product sourcing can also be practiced for acquiring raw materials, parts and components at lower rates. In these cases, companies are choosing to run manufacturing within their native markets. As opposed to procurement, product sourcing has a relatively short term focus, as there are no guarantees about the consistent availability of low cost products. Product sourcing companies are making forays into newer alternative marketplaces. China is one of the most widely chosen destinations for sourcing due to the abundance of thousands of finished products, parts, components, equipment and raw materials across hundreds of categories. Sourcing and Procurement ManagementA complete process of sourcing and procurement management While sourcing keeps generating significant cost savings and better efficiency, thousands of businesses are outsourcing their production entirely. Doing so can be beneficial in a number of ways. Let’s take a brief look into what global procurement entails. Why Procurement Might Be Ideal for Your Organization Numerous industry leading businesses have set examples of how to derive benchmark profitability by shifting manufacturing to low cost marketplaces. Global procurement services aim to help organizations avoid paying high labor, infrastructure and energy costs in first world marketplaces. Procurement opportunities have improved significantly with the rise of healthy supplier bases across newer developing marketplaces. Business and political climates are also favorable for setting up production mechanisms in various southeast Asian, eastern European, African, middle eastern and Latin American marketplaces. Partnering with a procurement service provider can give you an insight into low cost markets and their core benefits. Procurement agencies combat developing market volatility with implementation of risk management strategies. With successful low cost procurement businesses are able to meet demands faster, and lay also emphasis on developing their offerings. Targeting Growth With Sourcing and Procurement Strategies The scenario of global sourcing and procurement has changed significantly over the last two decades. Agencies are now able to take precise decisions to protect the investments of clients in developing countries. The implementation of advanced communication and analytical technology enable transparency and better overview of process variables. Supplier selection is also an area that agencies lay stress on, especially with sample testing and contract negotiations. These developments have made the path clear for thousands of emerging businesses. The right approach to efficient sourcing and procurement is necessary for gaining positive outcomes. Selecting the right agency is integral, to gain access to high-value, low cost suppliers. Whether you intend to source finished products or parts, or outsource your entire production, there are ample great opportunities. Vietnam, Cambodia, Mexico, Thailand, Myanmar and various other emerging marketplaces offer quality and volume at benchmark low costs. Some of the core benefits of sourcing and procurement are – Far better rates for labor, energy, raw materials and production processes. Decreased involvement in production activities which allow businesses to focus on growth. Better production volumes at lower expenses, within specified timelines. Long term growth and chance to get ahead of key competitors. Today’s competitive business markets make it hard for businesses to gain a foothold. But with innovative global sourcing and procurement, you can generate better profits.