In the latest SCDigest, they compiled a list of ten signs that may indicate your global sourcing strategy needs a tune-up including:

• Many of the nominal savings on a per unit basis from global sourcing are, in reality, lost when true overall logistics and supply chain costs are accurately considered.
• Decreases per unit costs come at the price of substantial increases in inventory, as inventory buffers and inventory obsolescence increase significantly as a result of the longer and more uncertain lead times.
• Expediting charges to get goods from overseas in time to meet production and distribution requirements increase substantially.
• Sales opportunities are lost due to failure of offshore goods to arrive on time.
• A company consistently misses budgeted financials due to a mismatch between expected total landed costs and actual costs.
• Most global sourcing process and handle manually, with minimal technology support, and staff has an increasingly difficult time keeping up.

Here are a few of the signs that a company needs to re-assess its approach to global sourcing and bring in some outside help.  Read the entire list at SCDigest:

  http://www.scdigest.com/assets/On_Target/09-06-23-2.php

A new AMR Research report suggests companies are moving away from sourcing operations in China since they are finding that the risks are not worth the rewards.  Top concerns include Intellectual Property(IP) infringement, product quality riskiness and regulatory compliance. Last year's study showed the primary concerns were related to transportation costs and volatile commodity prices while supplier failure was not on most firm's radar.   There has been a dramatic change since this year's study shows that given the global economic crisis and turmoil, supplier failure is now the most pressing issue. 

A final interesting observation from the study is that companies are increasingly using simulation and modeling tools as a means for reducing risk.  Simulation tools can perform what if analysis so companies can evaluate alternative ship methods, routes and develop contingency plans to mitigate the risk of a supply chain disruption.

http://www.amrresearch.com/Content/View.aspx?compURI=tcm:7-43399