All posts in global sourcing

Landed Cost Model vs. Should Cost Model

I received a great question on a webinar I did today:  “What’s the difference between a should cost model and a landed cost model?” This is a fun question to answer.  These two things could be the same in a certain application.  But how they are typically constructed and used in practice makes them distinct. A should cost model is most…

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Nearshoring or Offshoring? Tips to choose the right strategy

Special thanks to Source One Management Services for this guest post When cost savings is the main driver of a sourcing initiative, many consider looking at what is available abroad, in countries where both labor rates and material costs are known to be more competitive than in the US. Mexico, China, India, and Vietnam are some places where these costs…

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How To (Properly) Buy In China

Special thanks to Source One Management Services for this guest post At first sight, buying in China might seem ideal: low labor cost makes product cheaper than when manufactured in occidental factories, inducing a direct margin increase for the OEM or distributor selling in the USA. Yes, theoretically, when purely looking at numbers on papers, China appears to be the…

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How Much Global Supplier Auditing Is Enough?

Another day, another global sourcing controversy. Today’s controversy has stemmed from China Labor Watch’s new report about a Chinese supplier of Apple, Pegatron.  This report summarized an investigation in which China Labor Watch found working conditions at Pegatron and its subsidiaries to be far worse than those found by Apple’s own audits. However, it doesn’t appear that Apple was failing to acknowledge the…

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Japan’s Supply Chain Recovery: Interpreting The Estimates

A headline in yesterday’s Pittsburgh Post-Gazette read “Radiation spread raises new concern: U.S. fearing nuclear reactor emergency is greater than what Japanese officials are portraying.” Sandisk issued a statement saying that their “current assessment is that there has been minimal immediate impact on wafer output due to the earthquake. SanDisk continues to assess the situation for any potential future impact…

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Look Who Is At The Center Of The Latest Procurement Controversy: The Girl Scouts!

Last week, the Associated Press picked up on an interesting procurement story: the Girl Scouts of the USA were seeking bids for the uniforms they currently buy from an American supplier in New Jersey. Among the four bidders invited to participate, two were from outside the USA including one from China. The fact that an organization is evaluating all of…

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Global Sourcing Ethics Goal: Audit Better Than The National Labor Committee

Earlier this week, I came across an article alleging that Microsoft has been doing business with Chinese suppliers who have been breaking labor laws. Specifically, those suppliers were accused of failing to register workers under 18 years of age and had allegedly forced them to work excessive overtime: 280 hours in a month against a limit of 60 hours per…

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