Table of Contents
The global economy is a reality of modern commerce, even for organizations which are not presently involved in direct international purchasing. Many organizations have customers and competitors throughout the world, either directly or by extension — for example, your customer's customer may be located on foreign soil.
Culture, Communication, and Negotiation
It is extremely important to understand that when one trades in another country one is confronted with new cultures, each of which has its own values, meanings of words, and acceptable patterns of behavior (see box on page 5). Failure to recognize these differences in culture, which are compounded by physical remoteness, can have very negative results (see box on page 5).
Sourcing, Selecting, and Managing Suppliers
Global purchasing and supply management requires an understanding of the supply markets, especially in creating competitive conditions in such markets where it may not necessarily exist. If the existing supply base is inadequate or not competitive it can threaten the viability of the customer's entire operation.
Other Essential Considerations
Purchasers need to be aware of all of the unique implications when purchasing internationally, such as currency, customs, logistics, and legal issues, all of which have a significant impact on the purchase of goods and services abroad.
Sheila Finn, C.P.P.
Sheila Finn is president and CEO of PMMS Consulting Group (North America) Inc. in Etobicoke, Ontario, Canada, and is a past national president of the Purchasing Management Association of Canada (PMAC). Ms. Finn has authored and teaches courses in supplier management, inter-national buying, and supply strategies. She has been a spokesperson in the areas of supply, logistics, and environmental management for academic institutions, professional associations, and business organizations. Ms. Finn earned her degree from McGill University. Ms. Finn thanks and acknowledges the contributions of Lynn Johannson, president of E2 Management Corporation (E2M), and Brian Court, FCIPS, vice president of PMMS Consulting Group (North America) Inc., and director of PMMS Consulting Group Ltd. of the United Kingdom. E2M is a management consulting firm specializing in competitive improvement through environmental and economic performance. Brian Court is co-author of the book Profitable Purchasing Strategies.
- Court, Brian. Best Practices in the Global Market, PMAC (Conference), 1995
- Electronic Components Magazine (Asia), November 1990, "Unscramble Mixed Signals on How to Organise Purchasing"
- Hall, Edward T. and Hall, Mildred R. Understanding Cultural Differences: Germans, French and Americans, Intercultural Press Inc., 1989
- Locke, Richard. Global Supply Management: A Guide to International Purchasing, Irwin Professional Publishing, 1996
- Monczka, Robert M. Extract from Global Procurement and Supply Chain Benchmarking Initiative, 1996
- Purchasing and Supply Management, January 1991, "Networking or Not Working"
- Steele, P.T. and Court, B.H. Profitable Purchasing Strategies, McGraw-Hill, 1996
- Steele, P.T. and Murphy, J. Russill. It's A Deal: A Practical Negotiation Handbook, McGraw-Hill, Inc., 1995
- Supply Management (UK), July 1996, "Global Warming"
FOR FURTHER READING
- Daniels, John and Radebaugh, Lee. International Business, Addison Wesley, 1995
- Hickman, Thomas. Global Purchasing: How to Buy Goods and Services in Foreign Markets, Irwin Professional Publishers, 1992
- Kotabe, Masaaki. Global Sourcing Strategy, Quorom Books, 1992
- Purchasing Today™, July 1997, "The Current on Countertrade"
- Purchasing Today™, July 1997, "The Female Factor in International Negotiations"
- Purchasing Today™, July 1997, "Our Currency or Theirs?"
- Purchasing Today™, July 1997, "Taking the Globe's Pulse"
- Purchasing Today™, November 1996, "Negotiating in Any Language"
- Purchasing Today™, July 1995, "Unexpected Costs in Global Procurement"
- Wood, Donald; Barone, Anthony; Murphy, Paul; and Wardlow, Daniel. International Logistics, Chapman & Hall, 1995
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