Global sourcing refers to the strategy of procuring raw materials, services, or products from production sources worldwide, not only domestically. It is a preferred approach for businesses to obtain more cost-efficient yet better-quality raw materials and products. Moreover, global sourcing helps reduce the risks associated with raw material procurement for production and drives businesses forward by enabling effective material and product procurement.

However, implementing a global sourcing strategy has its challenges in language and cultural differences, transportation and logistics, and product quality control. Businesses must closely monitor these aspects to mitigate future problems. An effective approach is to engage the services of a global sourcing solutions provider with expertise in manufacturing and procuring raw materials from around the world, who can handle the entire process from start to finish.

The vast paper and packaging industry caters to virtually every business. It encompasses various applications, from food containers for items like soup, dairy products, condiments, and seasonings to packaging products for the parcels sent for delivery and distribution worldwide.

The paper and paperboard packaging market was worth up to USD 203 billion in 2021 and is expected to reach USD 243 billion by 2030. Asia-Pacific countries dominate the paper and packaging market, especially China, which is a production base for numerous products. Southeast Asian countries also experienced exponential growth in e-commerce and food delivery services, and this surge in demand has led to an increase in the importation of paper and packaging.

As businesses actively pursue expansion, they must seek cost-effective paper and packaging materials that align with specific requirements to avoid supply chain disruptions and production delays. Global sourcing solutions in procuring paper and packaging materials help lessen these risks.

Global sourcing is a useful strategy for businesses in procuring quality raw materials at cost-effective prices. Here are some key benefits of this strategy:

With the opportunity to source paper and packaging from anywhere in the world, there are limitless options in terms of price and quality. In some cases, specific types of paper and packaging are not readily available within the country or may come at a higher cost. Global sourcing allows businesses to explore alternative options to find one that best suits their business requirements.

Labor shortages and high production costs present challenges that hinder businesses from expanding. Global sourcing helps increase production capacity while controlling costs by engaging manufacturers offering lower labor costs and cost-efficient technology. An increase in production capacity can impact potential revenue as well.

The supplier sourcing process has increasingly become more stringent in most industries. Suppliers worldwide strive to meet the strict production standards of multinational brands while maintaining competitive pricing and lowering costs.

The collaboration between businesses and their suppliers enables the exchange of new technologies and innovations to continually develop and improve production efficiency. Early adopters can benefit from learning better processes and methods.

Domestic markets may be too small or saturated, limiting business growth and expansion. Global sourcing is a good strategy for companies to broaden horizons to international markets. Oftentimes, expanding to the countries where they have partner suppliers or a manufacturing base makes practical business sense.

The first step is to devise a plan by determining the key factors for supplier selection, including prices, quality, transportation, and risks. These details must align with business goals and marketing strategies. The three main factors to consider when choosing a supplier are product characteristics, utilization, and expected quantity.

When searching for suppliers that match your criteria, there should be at least three suppliers for comparison and consideration. Look for established suppliers with a long track record who are credible and reliable. It will be advantageous if the supplier has a base of operation at the destination market so government documents and legal requirements can be processed quicker. At this stage, hiring a global sourcing solutions provider with expertise in finding suppliers best suited for the business will save time and resources.

It should be part of a standard operating procedure to ask for product samples from suppliers being considered. This is the best way to determine if their products are up to par regarding quality and standards. It is also a good idea to consider another service that a supplier may provide, such as inventory management or marketing, especially if it falls under their expertise.

Thoroughly study the pros and cons before signing the purchase contract. When the contract has been signed, set a meeting to discuss the needs and goals of the business and to answer questions the supplier may have. Suppliers must be informed of processes, policies, and requirements ahead of time to ensure clear communication and timely delivery.

The final step is to ensure that products are delivered within schedule and as expected. Products delivered must undergo quality control measures and verification to ensure standards are met and prevent unqualified products and raw materials.