A Country Selection Method for Global Sourcing

This article proposes a method for reducing the complexity of decisions in the international procurement process. This procedure is part of the "Global Sourcing Management-Tool", developed by the author in co-operation with the German mechanical engineering company Heidelberger Druckmaschinen AG and the Centre for European Economic Research Mannheim (ZEW). Based on foreign trade data, the method uses indicators, which allows a cross-section and longitudinal-section valuation of the average international competitiveness and the average supplied product quality of all possible supplier countries. The method thus provides a variety of information for procurement departments, including the present level and the dynamic of competitiveness and product quality for the potential supplier countries within every product group of the international product nomenclature (Combined System and the Harmonised System). Potential supplier countries - the companies of which have proven to be particularly competitive in the different product quality stages - are identified. This pre-selection of countries enables the companies to limit their search for potential suppliers to the selected supplier countries. High "search costs" are subsequently reduced and, in addition to that, trend prognoses can be constructed. Potential supplier countries which have not yet reached a certain quality standard or a certain competitiveness, but have caught up strongly during recent years, can be observed sensitively.

Cleff, Thomas (2005), A Country Selection Method for Global Sourcing, in: D. Barkovic, B. Runzheimer (Eds.), Osijek,