AFM333 Lecture Notes - Lecture 10: Global Sourcing, Offshoring, Outsourcing

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM333
• Professor: Seth Brouwers

Document Summary

Find better suppliers quickly: declining communication and transportation costs, advanced production capacity of suppliers. Supply chain: higher literacy, widespread growth, globalization. Finding goods or services from independent suppliers outside local market: lower costs, potentially faster service, flexibility. Contract manufacturing: hiring specialists, not to deliver value to the consumers, not core competencies. Offshoring: extending global sourcing by relocating a piece of the business into another country, usually manufacturing, cost advantage. Inputs: labour, raw material, electricity, access to fuel. Service industry: legal services, very expensive in north america, review of contracts, patents, research. Faster corporate growth: cost efficiency, access to qualified personnel abroad. Improved productivity and service: business productivity and service, business process redesign. Increased speed to market: access to new markets, technological flexibility. Challenges in global sourcing: vulnerability in exchange rate fluctuations, partner selection, qualification and monitoring costs, effect on the brand, exploiting.