Multinational purchasing and global sourcing extends way beyond simply buying the materials necessary to manufacture goods, but it actually extends to the acquisition of the devices used in taking the various parts needed to assemble a product and the putting them together to make a usable good.
Everything has a particular cycle to it, including global sourcing. For example, the assembly of a product has to go through various stages and these products may not be assembled by materials that have come from the same location. Through multinational purchasing, the head of the baby doll may be from China, the arms from Korea, and the clothes from Mexico. Each part of this doll has been acquired through careful global sourcing techniques for cost efficiency and quality. Processes such as this is what keeps the import and export business in business.
-Multinational purchasing is not only for products
When someone hears the words 'multinational purchasing' they, of course, think of materials or products being purchased from various countries around the world in order to manufacture a particular good. Although this is true, multinational purchasing goes way beyond the import and export of goods used for retail sales. Through proper global sourcing tactics, the multinational purchasing for the import and export of materials used in the assembly of products is very important. It turns out, in the case of countries such as China that manufacture many of the electronic devices we use, not all of the parts of the machinery used in assembly are domestic. Multinational purchasing becomes part of the companies who assemble the machinery to be distributed to other companies who manufacture products for the retail market.
So as you can see, the import and export business includes much more than just the products we see on our store shelves, which means global sourcing and multinational purchasing takes huge strides in making sure our world operates smoothly on and off the retail aspect of business. This also gives you a much wider view of what global sourcing entails since global sourcing is not only concerned with the multinational purchasing, import and export of consumer goods. Global sourcing is also concerned with the import and export of the materials necessary to make sure products are assembled for consumer use.
-Complex?
Yes, this does make the aspect of multinational purchasing and import and export operations a big more complicated. When we think of import and export we think of the ‘Made in China’ label hanging out on the back of our shirt or on the bottom of our tea kettle. Although it is true that those items are the result of import and export operations due to the acquisition of materials, it is also true that without global sourcing and multinational purchasing contributing to import and export operations it would be increasingly more expensive and difficult to manufacture goods for consumers.
The Meat of Multinational Purchasing