Communication and technology

Introduction

The world has changed ever more the last decade significantly, communication and technology have influenced on their world. In the 21st century the technology we have at our fingertips. As a consequence, all companies and industries attempt to take a reality advantage of technology, adoption with their companies.

Today's business environment has many times in modern history. Executives have more evolved. An organization focuses the search and development strategies to respond the needs of customers and organizations while facing the competitive business in the world markets. The customers have high consumer expectations if a retailer must meet customer expectations, quality and secure reliable sources of supply prices. Leading analysts agree that the strategy provides a strategic opportunity to be the most effective response. (Zunairah 08/05/2009).

This report will show what extent has online sourcing become a reality the end of the decade, in terms of tree the following criteria. It will answer the questions. Examine the role of the internet in international and global and I will talk about evaluating the benefit of online souring. Finally, assess the validity of the statement. And following show example in this report.

Role of internet in international

Nowadays, we believer that internet is not just important for their, but its necessary for many businesses. These include advertising, production, and business models. In the business side, the role of internet in international is a worldwide organization of people focused and coordinated their activities across borders. Indeed, it is an important tool for the development of added value for suppliers and customers and creates opportunities to attract customers which generate new revenue. For example, Rollins Leasing Inc., the internet has been increasing partnership with suppliers as well as reducing supply chain costs 5 to 15 per cent of the operations. Partnerships use an automated system easier and faster to save time and money (Richard A.Lancioni, Michael F et al, January 2000). For this reason, internet is the main infrastructure which information age, it becomes a reality. And also this is supported by Giga Information Group, Inc. that can save cost from business attain $ 1.25 trillion (G. T.Lumpkinand Gregory G.Gess, May 2004.). Generally, internet has principally remained in information display and it seems that potential in multi-stakeholder situations to expand the exchange of information and knowledge networks. At learningforsustainability.net n.d advised that the benefits of technology were not to build new “virtual” otherwise internet was invigorated to social networks. The reference of internet users at internetworldstats.com (07/11/2009) show that is growing that it could be a reason to support that operators turn to internet is the centre of business communications because of they can enlargement of the market, directly and fast.

At the same time, Industrial and manufactures are more developed and also more competitive market. Today, global sourcing is to be reinforced with companies in reducing cost by reduce supply chain. Hence global sourcing plays an important role for the success of multinational corporations owing to affect market access and cost effective technology, costumer services, quality and delivery (Arnold and Hefler, February 2000). Global sourcing is indentified the relationship between suppliers and companies. In generally the definition of global sourcing that aprocurementstrategyin which abusinessseeks to find the most cost efficient location for manufacturing a product, ever if the location is in a foreign country. For example, if a toy manufacturer finds that manufacturing and delivery costs are low-cost countries due to lower wages of foreign employees, the company might close the domestic factory and use a foreign manufacturer (business dictionary, n.d).

Global sourcing process: thetradegallery.com

Today's world the costumers have high expectations in quality of product over each year. If retailers meet this situation, they need to guarantee high quality and reliable sources of supply in competition price (Amy Roach Partridge March, 2007). Global sourcing has spread continuously over last decade which a business practices. The manufactures has been growing both the United State and the entire world, has enfolded global sourcing as a quick way of achieving the target. Leading analysts agreed that the sourcing strategy is the best method for reducing procurement prices 10 to 50 per cent lower than domestic source for these reason, added cost is associated with the building supply chain and able move to low-cost economies (Tim Minahan, Aug 11, 2003). Thus, CEOs and Chief financial officers focuses on global sourcing to improve their financial position by reducing costs that contribute directly to the bottom line and the risk abated. For instance, Holiday 2003 in the United State grabbed retainers marketed DVD players for $19.99 to $29.99. The costumer bought DVD players very fast and the commoditization of electronics was born because of the costumer bought DVD players very fast no one expects. (Jeremy Sacker, October 30, 2009).

Benefits of online sourcing

Online sourcing has several of benefits. In currently economic environment its small business or big business that needs to understand about online sourcing can be cheap. Instead, companies are small business to buy the winning quickly and inexpensively. Even a stand alone company can save costs for a company to produce product. The company's mid-way point they want to reduce their cost of online sourcing process, but they don't want to fix the software for firewall. The significant of online sourcing is saving and effective for services and goods because of organization can take benefits for online sourcing. For instance, the sourcing process can be saved £32 million in services purchase and goods to FedEx. It have been better and better for companies to find benefit and business channels (nccmembership.co.uk).

A clearly effective is benefits of global sourcing is that the opportunity of cost reduction. The new business globally is tending to global sourcing. The benefit of global sourcing is not just low cost but includes sustainable technology and a wide range of growth markets. Apart from global sourcing, it covers large and widely available markets ability. At the same time, companies can sell their products the entire world as well as can lower estimates, give benefit of cost to companies and business partners to cutting product overheard cost too (Jennifer Jones September 5, 2008). Otherwise, global sourcing is the development of service and quality meanwhile it can be reached in particular cost savings such as China. One of example of this is A.T. Kearney, global logistics company found global sourcing can saving cost an extra $150 million to the bottom line very $1 billion of purchases. (McGowan, Kevin S, October 1997).

Opportunities in global sourcing Source: Kerkhoff Consulting

The other side, global sourcing can become a reality from the reduction costs. It is a reality for pump manufactures in the United State. According to Michael Dillion, president of seepex, Inc, a leader supplier of progressive cavity pumps observed that the global sourcing has saved his company 60 per cent. The company purchases mechanical seals, electronic drives and motor from overseas suppliers. In fact, global sourcing has intended strategies of variables, a currency flows and reduces costs and he added the customers are benefited by lower prices, many products to choose and faster deliveries. In contrast, Aberdeen Group, companies were reduced service and material costs by 10 per cent to 35 per cent from low cost country suppliers (Susan L. Schaibly, September 2003).

ByMonczka, Robert M.Publication:Journal of Supply Chain ManagementDate:Monday, September 22 2003, by allbusiness.com

Furthermore, risk of operation issues could happen in global sourcing. These deal with foreign exchange rate, political, language or hidden cost that can cover up factor. On the other hand, global sourcing has both advantages and disadvantages. Some key disadvantages of global sourcing related with hidden costs, time zones, political risk in countries emerging economics, codes of conduct include supply chain and equipments failure. For example, Internal expenses of hidden cost according to John Brockwell works as a supply chain vice president within JP Morgan's Global Trade Services unit in New York agrees say that working with overseas suppliers that the difference in performance is time to change working hours and behaviour of internal employees that can increase overtime, reduce production costs otherwise change costs. Moreover, Quality breakdowns of hidden costs, this is supported by Procurement Strategy Council report that traditional model consider the cost of providing transportation from around the world and higher inventory costs due to longer supply chains and higher taxes and duties. While these charges can reduce the net savings, emerging markets afford cost advantage of 25 per cent saving. (dariantrading.com, 6 June 2009)

The breakdown of global savings costs

Traditional Mode)

(Based on industrial products example)

As this model from the Procurement Strategy Council shows, hidden costs such as non-compliance, internal resource costs and costs of mitigating reputation risk—including working conditions, foreign corrupt practices, and data security issues—can shave off significant savings on a global sourcing contract.

Assess the validity of statement

The overview business online or global business is likely benefits to most of companies and it has been continued attention owning to its popular business strategy. Many Eastern Europe and Asia where cheap and skilled labour are exciting opportunities for the development of systems or components and reduce production costs. This mean global sourcing can save cost approximately 10 per cent to 40 per cent. This is supported by most of companies in the United State are approved global sourcing as mainly faction of proceed strategies plan.

It seems that global sourcing receives beyond benefit from many firms for example a big company such as the adidas Group. The scoring on all field annual report 2005 report that headquarter/consolidation column is assembled in the global sourcing function. There are based on at arm's length between the segment and transaction, but no sales between the brands. The emphasis is global sourcing on adidas Group that they are primarily creating and sourcing strategy of implementation which under the various brands (Reebok and TaylorMade-adidas Golf). The commitment product supplies and support are navigating business in the industry by innovation, and agility. Hence, these are significantly to lead business successful the supply chain as a whole. The operating efficiencies is greater economic of scale in global sourcing about 20 per cent in 2005.

Additionally, the Northbrook, IDEX pump industry in the United State they changed the way to reduce costs. The company has utilized global sourcing its can save $ 8.0 million in 2003 and they saved $ 4.7 million in 2002. IDEX think about a significant bottom-line opportunity of global sourcing.

The global suppliers will be achieving by significant cost savings as IDEX at the same level.Pump manufactures use global sourcing compete its just one of many tools (Susan L. Schaibly, September 2003).

The success of these companies is a guarantee that global sourcing can take benefit to businesses. Despite the fact that risk of hidden costs or supply chain risk had occur in business, it could eliminate the risk away. Firstly, David Hannon, Purchasing.com (12/3/2009) declared that global sourcing is cheap, but it is not free. Global sourcing expertise commented on what the nine hidden costs that can cover up factor such as internal fees, supplies health or duty and tariff changes. However, the operation of successful must be combined several factors that need to understand and balance fraction are material costs, transportation costs, inventory carrying costs, cross-border tax, operational performance and supply and operational risks and supply.

Supplies must understand and manage these factors to keep up with tax regulations are changing dynamically. In addition, the balance of performance, risk and tradeoffs of cost require by companies. The companies decide claim to balance performance, risk and the tradeoffs cost. Nevertheless, this is supported by the WP Carey School of Business at Arizana State University stated that although, the role effective of companies comes from global sourcing, but it remain an abundance of gab for development. On the other side, global sourcing can undo saving cost plan. That might mean risk of global sourcing or it just remind operator aware if the process can not following by planned cause by the impact on their business (Tim Minahan 11 September 2003).

And secondly, (Steve Minter, 17 June 2009) the reports"Physical Risks to the Supply Chain” include equipment failures and infrastructure breakdown. This is supported by insurer FM Global and conducted by CFO Research Services reported that global sourcing strategies is increasing physical risks 40 per cent has affected their bottom line which equipment failure and internal facilities in companies. The majority of executives believe that their companies are effective in reducing the risk of the supply chain 40 per cent. Steps to reduce risk are:

• Select reliable vendors
• Knowledge about suppliers to reduce risk
• Approach to control supply chain risk

Summarise

Organizations are trying to find the progress of global strategies. Global sourcing strategies offer the potential to increase the main organization and a tool of corporate support operations. The increased competition has driven manufacturers to source overseas or move operations to lower cost countries. Discussion about the impact of international production and supply is more than 40 years (Skinner, 1964). Nonetheless, last decade, especially industrial globalisation has overcome all of the performance of supply chain network. The objective of this report is to evaluate the efficacy and potential impairment charge of global sourcing. Moreover, this report provides evidences about the business benefits from global sourcing and to quantify the results of successful global sourcing strategy (M Holweg and F Pil, 05/2008). Eventually, hopefully it is benefit future researchers to evaluate and develop strategies of global sourcing and supply chain throughout the world.

Bibliography

Book

• Gerd Kerkhoff, Global sourcing: opportunities for the future: China, India Eastern Europe (Wiley-VCH, 2006).
• Journal article
• Canbolat, Y. B., “Analysing risk in sourcing design and manufacture of components and sub-systems to emerging markets.,” ed. Gupta, G. Matera, S. Chelst, K., Taylor & Francis (01September2008), http://metalib.hud.ac.uk/V/762AESA6M7ECNB9G1GG9NK9KDXJXLMX5BMFJNDEPGRXP9RF43S-25589?func=quick-3&shortfamat=002&set number=00526&set entry=000001&fortmat=999.
• G. T. LUMPKIN and GREGORY G. DESS, “E-Business Strategies and Internet Business Models: How the Internet Adds Value,” Organizational Dynamics 33, no. 2 (May 2004): 161-173.
• Hannon, David, “9 hidden costs of global sourcing,” Purchasing 138, no. 3 (March 2009): p38-41.
• McGowan, Kevin S, “EBSCOhost: The rise in global sourcing and logistics implications for shippers,” A.T. Kearney, no. 38 (October 1997): p83, 4p, 1 chart, 1 diagram, 2 graphs, 1 colour.
• M Holweg and F Pil, “Theoretical perspectives on the coordination of supply chains,” Journal of Operations Management 26, no. 3 (5, 2008): 389-406.
• Richard A. Lancioni, Michael F. Smith, and Terence A. Oliva, “The Role of the Internet in Supply Chain Management,” Industrial Marketing Management 29, no. 1 (January 2000): 45-56.
• S, Robin, CFO, adidas-Salomon AG, SAL. OPPENHEIM INVESTMENT CONFERENCE (Adidas Group, October 5, 2005), www.adidas-group.com/.../pdf/presentation/2005/1005_SalOppenheim.pdf - 2005-11-1.
• Susan L. Schaibly, “The global sourcing imperative,” World Pumps 2003, no. 444 (September 2003): 40-43.
• “The global sourcing imperative,” World Pumps 2003, no. 444 (September 2003): 40-43.
• Trent, Robert J, “International Purchasing and Global Sourcing -- What Are the Differences?,” ed. Monczka, Robert M, Journal of Supply Chain Management 39, no. 4, A Global Review of Purchasing & Supply Fall2003 (November 2003): p26-37.
• Y. B. Canbolat a; G. Gupta b; S. Matera b; K. Chelst c, “Analysing risk in sourcing design and manufacture of components and sub-systems to emerging markets - International Journal of Production Research,” September 1, 2008, http://www.informaworld.com/smpp/content~db=all?content=10.1080/00207540701266807

Report

• Adidas Group search, Annual Report 2005 (Germany: Adidas Group, 2005), www.adidas-group.com/.../_downloads/pdf/annual_reports/2005/GB05_engl.pdf - 2006-03-02.
• S, Robin, CFO, “SAL. OPPENHEIM INVESTMENT CONFERENCE,” http://www.adidas-group.com, October 5, 2005, www.adidasgroup.com/.../pdf/presentation/2005/1005_SalOppenheim.pdf - 2005-11-1

Website

• Aberdeen Group, “Global sourcing: What you need to know to make it work,” August 11, 2003, http://searchcio.techtarget.com/generic/0,295582,sid182_gci1049457,00.html.
• “Global Sourcing Blog » global sourcing ideas,” May 3, 2009, “Global sourcing definition”, http://www.businessdictionary.com/definition/global-sourcing.html.
• “Global survey shows manufacturing survey may have begun,” March 6, 2009, http://www.dariantrading.com/globalsourcingblog/?tag=global-sourcing-ideas “The Trade Gallery - Global Sourcing,” http://www.thetradegallery.com/Services.html.
• “Internet Growth Statistics - Global Village Online,” January 2008, http://www.internetworldstats.com/emarketing.htm.
• “Is online sourcing the future for corporate procurement?” no date, http://www.nccmembership.co.uk/pooled/articles/BF_WEBART/view.asp?Q=BF_WEBART_113346.
• J, Jennifer, “Global Sourcing and Their Advantages,” http://www.ezinearticales.com, September 5, 2008, http://ezinearticles.com/?Global-Sourcing-and-Their-Advantages&id=1470313.
• Steve Minter, “Industry Week: Increase in Global Sourcing Expected Despite Supply Chain Risks,” Magazine, June 17, 2009, http://www.industryweek.com/articles/increase_in_global_sourcing_expected_despite_supply_chain_risks_19386.aspx.
• “The growing role of the Internet,” http://learningforsustainability.net, no date, http://learningforsustainability.net/internet/.
• “The Trade Gallery - Global Sourcing,” http://www.thetradegallery.com, no date, http://www.thetradegallery.com/Services.html.
• Zunairah, “The Internet and Globalization | Socyberty,” http://www.socyberty.com, May 8, 2008, http://socyberty.com/issues/the-internet-and-globalization/.