Purchasing leaders rank globalization a top issue

Staff -- Purchasing, 11/3/2005

Globalization—specifically, the sourcing of an increasing amount of the value content of products—is one of the major issues purchasing professionals have to grapple with today.

So say members of PURCHASING magazine's Editorial Advisory Board. The Board met at the magazine's Waltham, Mass. offices recently to exchange ideas with the editors on the most important topics in the field and the directions the profession is taking.

The consensus: to be effective dealing with global suppliers, purchasing staff have to learn, among other things, about the history and culture of the countries they are sourcing from. Only then can they negotiate successfully and develop close relationships with suppliers from low-cost countries, a critical factor as companies strive to be competitive. Indeed, one Board member said that within the next year it's possible that more than half of his company's procurement staff would be located in low-cost countries.

Other topics the Board members discussed included risk management, diversity and the buying of services.

Diversity of the supplier base—and within a company's employment ranks—is growing in importance, the Board agreed. It's part of a larger movement toward the expression of more social responsibility, members said.

The PURCHASING Editorial Advisory Board is comprised of top purchasing executives from companies such as Tyco, IBM, Intel, AMR, National Instruments, Delphi Corp., Alcoa, and Lucent, among other industrial leaders. Members meet with the magazine's editors periodically to brainstorm ideas and review best practices.