Global Purchasing

Global Purchasing and the Effect on Society

Introduction:

Global purchasing is a procurement strategy wherein a business organization or an enterprise tries to find out the ways which will be the most cost effective in dependence on the location for manufacturing a product. This is even when the location of the product is in a foreign country. Most of the global purchasing is done keeping in mind the ways to save up on money for the company.

For instance, if a furniture manufacturer finds out that manufacturing and delivery costs are much lower in a foreign country than in his home country due to reasons such as lower wages of foreign employees, the company might close the domestic factory (on the home land) and use a foreign manufacturer or even build a factory there (Arnold, 1989).

Regardless of the location of the place, global purchasing and sourcing is done because on the long run, the company will be able to benefit from this. As a result, a lot of companies are now exploring various other regions in order to find sustainable ways of global purchasing. In fact, in a lot of companies now, global sourcing has become an important and vital strategy and there are even special departments which take care of the sourcing specifically.

It is a touch economic world for all companies and over time, it has been seen that global purchasing has led to the company saving 10-35% which is almost half the battle one. The company can only progress with the help of global purchasing, but it should be kept in mind that certain strategies are followed by the company so that the entire process of outsourcing and purchasing takes place in a smooth manner.

Global Purchasing Includes what for the Company?

We have just read about the definition of the term Global Purchasing. Now that we know the definition, you should also know what the entire process entails. There are certain steps which are to be followed in order to make a successful global purchase.

Step 1:...