q-sourcing - Use in Industry

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A study shows, labour costs in the magnitude of 10% of the German level do not guarantee a decrease in the overall purchasing cost. Head-purchasers and leading logistic officers from 203 German companies declared, that every third company in China was more expensive for purchasing than in Germany when the logistic and quality costs were included in the calculations. It can thus be seen, that not every company and project group will be able to automatically decrease their costs when mimicking the general trend of purchasing in low-cost countries. Since next to the incompatibilities between the component requirements and the procurement market properties, purchasing in low-cost countries is associated with variant other challenges. Primarily these problems result from the buying company, such as difficulties to form, train and keep a purchasing team, cultural and communication barriers, difficulties in understanding the market and managing the supply chain, incapacity to develop the supplier as well as capacity problems within the local company department.
The resulting problems and challenges named above are primarily based on a lacking co-ordination between the procurement market, the component and the skills and resources of the buying company. To avoid future problems, it is thus essential to mediate the co-ordination precisely. For this a special, step-by-step scientific and usable methodology is to be developed and implemented by the buying company.
Additionally, the evaluation and constructive co-ordination of the component spectrum based on the adequacy of purchasing in low-cost countries make the immediate reduction of quality and qualification costs based on supplier deficiencies, as well as the general reduction of deliver time, costs and quality risks possible. Taking in to account the technological and market uncertainties, as well as the flexible operational possibilities enables proactive evaluation of suppliers. Alongside this, the method for supplier evaluation also allows the possibility to secure the probability of an investment decision under dynamic market criteria, and thus allows the optimisation of the investment strategy (supplier development investment) while under the influence of global uncertainties. Ultimately the evaluation of the operational possibilities, investments and uncertainties leads to a supplier development strategy which determines, to what degree qualification measures are sufficiently economically rewarding and thus determines a preventative avoidance of costs.