Sustainability Considerations in Global Sourcing
1. Operational:
2. Strategic:
3. Company reputation:
4. Employee:
- Cost advantages vanishes over time.
- Quality of delivery can not be maintained.
- Organizational effectiveness across company employees and outsourced workers suffers.
2. Strategic:
- Company looses expertise.
- Company looses ability to innovate in new products, new markets and new business and operational models.
- Loss of employee depth to train future leaders.
- Dependence on outsourcer for survival and growth.
- Loss of control over product quality and functions.
3. Company reputation:
- Negative public image due to use of offshoring.
- Perception of poor quality.
4. Employee:
- Low employee morale.
- High employee turnover.
- Poor employee loyalty.
- Loss of organizational effectiveness.
Sustainability Considerations Influence Outsourcing Choices
Sustainability Impacts Every Phase of the Outsourcing Life Cycle
- O&O strategy must be aligned with business strategy with long term sustainability.
- Opportunity assessment should keep a longer term view.
- Long term impact on the company should be taken into consideration when choosing functions to outsource.
- Supplier selection must include long term strategic alignment between the two companies.
- Governance must build long term relationship rather than short term wins alone.
- Sustainability issues impacted by global sourcing.
