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INTRODUCTION

Small- to medium-size companies can benefit as much, if not more than larger corporations, from global purchasing. They could also use global purchasing as a springboard for international business development, access to distribution channels and product diversification through strategic alliances and equity participation in foreign firms.

There are no theory nor system that apply uniquely to small- to medium-size companies when it comes to global purchasing. Strategies defined for small- to medium-size companies draw heavily from the experience of large corporations and the evolution of purchasing and supply management, as well as from TMG experiences.

There are so many methods being used all over the world that we need to resolve questions of:

We will address some of the critical issues of global purchasing for small- to medium-size companies, their interpretations and significance to global sourcing as ingredients for success. We hope that you will gain insights on the latest trends, initiatives, and strategies in purchasing and supply chain management which will be useful to small- to medium-size companies’ leaders.

There was a time when we were limited only by how smart we were technologically. If we could think of a way to do something, we could proceed with the assumption that the resources would be there to do it.

During the last decade, however, we have been told more and more frequently to go back and find another way to do it for fewer dollars, less energy, fewer people, less material or in less time.

With the assumption that there are a hundred or a thousand ways to do anything, what is the best way? … The best way in terms of best meeting the objectives of what we want accomplished in relation to the resources required to do it.

It is the process FOR GETTING MORE FOR LESS.

In a hardware product it is getting performance, better quality and improved customer satisfaction for less cost to produce. Applied to an organization or a service activity it is getting desired results faster with fewer resources.

That what is demanded from modern day global purchasing and supply chain management.

Leading Corporations throughout the world recognized that purchasing and supply chain management are critically important strategic functions.

Because they are so important in today’s highly competitive global market, a firm’s success depends upon its ability to fully integrate its purchasing and supply chain management goals into its overall corporate strategy.

Global purchasing presents the same complexities and challenges found in "domestic purchasing" but with added opportunities and risks.

Global purchasing does not just mean buying material from overseas suppliers.

It means:  

Your supply chain starts at product research and development, and goes through to where you deliver the product to customers. Supply chain efficiency is what it is all about.

In order to fully benefit from global purchasing, there is a need of

Also, there is a need to be aware of the complexities of purchasing decisions and supply chain management:

Traditionally, marketing, distribution, planning, manufacturing, and the purchasing organizations along the supply chain operated independently. These organizations have their own objectives and these are often conflicting. The result of these factors is that there is not a single, integrated plan for the organization - there were as many plans as businesses.

Consequently, the purchasing and supply functions will be part of integrated and cross-functional teams. And, in this evolution, the role and importance of purchasing and supply management will emerge as a primary element of business strategy and will span a broader range of activities than traditional buying-related functions to include supplier qualification, certification, development, strategic alliances, management of deliveries and closer coordination of inventories and material flow.  

Having introduced, in broad brush, the critical issues of global purchasing which small- to medium-size companies will encounter, we will now address each one of them in a more detailed way.  

Some topics apply to all organizations, others apply partly or in a combination form. And since there is no "method that fits all", we will be raising a lot of questions and pointing out to the "how to".  

It is recommended that an organization should start by assessing its global purchasing readiness. Addressing management organizational issues and financial/risk management issues is a good start.  

What products or services to source should be the next step.  

In global purchasing, the process of identifying, researching, evaluating prospective suppliers should also be applied to prospective countries of supply.  

Then we will cover the management of the global purchasing business.  

We will also investigate the alternatives of doing global business without having your company directly involved in the process.  

With Partnerships and Strategic Alliances we can evaluate how your new venture into Global Purchasing can be a springboard for international business development, access to distribution channels and product diversification and equity participation in foreign firms.

Remy M. Mauduit

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