Problem:
Alumini Workshop (AW) was established in the year of1992 and is owned by Smith family. It manufactures a range of aluminium products. All the raw materials are bought from the local market. The business had grown from a small workshop to become one of largest manufacturers in the Mauritian aluminium industry. The major customers are mainly government agencies as well as private firms. But, since a few months the firm is witnessing major threats from at least two aluminium workshops. Both import their raw materials from China. Market Intelligence reports that their customers appreciate the quality of their products and their prices are comparatively low.
The Managing Director, Mr Albert Smith, is considering reviewing its sourcing strategy. But AW has no experience in overseas purchase.
Task:
The Managing Director has requested you, as the Procurement Manager of AW, to write a report highlighting the issues which require to be addressed before a final decision concerning the adoption of an international sourcing strategy can be made. Your report must comprise the following issues:
- The major challenges encountered when sourcing internationally.
- Ways to find an international source.
-The key issues that a buyer must consider when sourcing internationally.
- Benefits reaped when adopting an international sourcing strategy.