Global Sourcing and Outsourcing Concepts

Vocabulary flashcards based on the concepts of global sourcing, overseas manufacturing, and global outsourcing.

Global Sourcing of Inputs

Acquiring raw materials or resources from overseas suppliers, often to reduce costs.

Advantages of Global Sourcing

Includes access to cheaper resources, potential reduction in production costs, and availability of resources not found locally.

Disadvantages of Global Sourcing

Challenges include language barriers, potential bad reputation from supplier practices, and time-consuming delivery.

Overseas Manufacturing

Producing goods in a location outside of the business's origin country, often to achieve lower production costs.

Advantages of Overseas Manufacturing

Includes access to skilled employees, lower production costs, and potential customer satisfaction due to lower prices.

Disadvantages of Overseas Manufacturing

May include job losses for local employees, time-consuming deliveries, and risks of damage during transportation.

Global Outsourcing

Transferring specific business activities to an external business overseas, often to lower costs and improve quality.

Advantages of Global Outsourcing

Increases productivity, reduces labor costs, and allows businesses to focus on core activities.

Disadvantages of Global Outsourcing

Includes reduced control over activities, potential poor CSR affecting reputation, and communication problems due to language barriers.