Worldwide can be expensive

Many companies from the distributive trade and consumer goods industry are neglecting indirect procurement costs involved in global sourcing. Some examples of such costs are taxes, possible supply failures, exchange rate risks and the cost of quality assurance. One in four of the purchasing managers who were questioned within the framework of a survey by Pricewaterhouse Coopers, an accountancy and consultancy firm, was unable to put an exact figure on the cost benefit achieved through so-called global sourcing. China is currently by far the most important procurement market, where 83 per cent of the companies surveyed do their buying. India comes next in second place at 58 per cent. However, as the survey suggests, it is not only the low-wage countries that are of significance when it comes to procurement. For example, 68 per cent of the European retailers and consumer goods companies questioned also buy in Italy.