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35 Global Sourcing Essential Terms

35 Global Sourcing Essential Terms

35 Global Sourcing Essential Terms

 

 

 

Welcome to our guide on global sourcing essential terms! In today’s interconnected world, businesses are increasingly relying on global sourcing to secure goods and services at competitive prices. As a result, it’s crucial for businesses to familiarize themselves with key terms related to this practice.

 

 

 

 

  1. Global Sourcing: The practice of sourcing goods and services from the global market across geopolitical boundaries.

     

  2. Supply Chain Management: The management of the flow of goods and services and includes all processes that transform raw materials into final products.

     

  3. Outsourcing: Obtaining goods or services from an outside or foreign supplier, especially in place of an internal source.

     

  4. Offshoring: The relocation of a business process from one country to another—typically an operational process, such as manufacturing.

     

  5. Vendor: A party in the supply chain that makes goods and services available to companies or consumers.

     

  6. Procurement: The process of finding, agreeing to terms, and acquiring goods, services, or works from an external source.

     

  7. Supply Chain: The sequence of processes involved in the production and distribution of a commodity.

     

  8. Lead Time: The time between the initiation and completion of a production process.

     

  9. MOQ (Minimum Order Quantity): The smallest amount of set stock that a supplier is willing to sell.

     

  10. Incoterms (International Commercial Terms): A series of pre-defined commercial terms published by the International Chamber of Commerce relating to international commercial law.

     

  11. Freight Forwarder: A person or company that organizes shipments for individuals or corporations to get goods from the manufacturer or producer to a market, customer, or final point of distribution.

     

  12. Customs Compliance: Adhering to the requirements set by a country’s customs authority.

     

  13. Duty: A tax levied by a government on imports or exports of goods.

     

  14. Tariff: A tax or duty to be paid on a particular class of imports or exports.

     

  15. Trade Barrier: Any regulation or policy that restricts international trade.

     

  16. Import License: Official permission issued by a government allowing the shipping or delivery of a product across national borders.

     

  17. Export Control: Government measures to regulate and restrict the export of certain controlled goods, technologies, and services for reasons of national security and foreign policy.

     

  18. Compliance: Adherence to laws, regulations, guidelines, and specifications relevant to business operations.

     

  19. Risk Management: The identification, evaluation, and prioritization of risks followed by coordinated application of resources to minimize, monitor, and control the probability or impact of unfortunate events.

     

  20. Total Cost of Ownership (TCO): An estimation of the expenses associated with purchasing, deploying, using, and retiring a product or piece of equipment.

     

  21. Quality Control (QC): A process through which a business seeks to ensure that product quality is maintained or improved.

     

  22. Strategic Sourcing: The process of developing channels of supply at the lowest total cost, not just the lowest purchase price.

     

  23. Supply Chain Optimization: The application of processes and tools to ensure the optimal operation of a manufacturing and distribution supply chain.

     

  24. Ethical Sourcing: Ensuring that the products being sourced are created in safe facilities by workers who are treated well and paid fair wages.

     

  25. Currency Fluctuation: A variation in the exchange rate of one currency compared to others.

     

  26. OEM (Original Equipment Manufacturer): A company whose goods are used as components in the products of another company.

     

  27. ODM (Original Design Manufacturer): A company that designs and manufactures a product, as specified, that is eventually rebranded by another firm for sale.

     

  28. Just-In-Time (JIT) Inventory: A strategy to increase efficiency and decrease waste by receiving goods only as they are needed in the production process.

     

  29. Value Chain Analysis: A process where a firm identifies its primary and support activities that add value to its final product.

     

  30. Logistics: The detailed coordination of a complex operation involving many people, facilities, or supplies.

     

  31. Reverse Logistics: The process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal.

     

  32. Global Trade Compliance: The practice of streamlining the process of trade across multiple countries to ensure efficiency and legal compliance.

     

  33. Sourcing Agent: An individual or company responsible for locating suppliers and negotiating contracts.

     

  34. Certification of Origin: A document declaring in which country a commodity or good was manufactured.

     

  35. Sustainability in Sourcing: A commitment to environmental and social responsibility in the sourcing of products and materials.

 

 

 

 

Understanding these terms is crucial for businesses engaged in global sourcing, as they navigate the complex and dynamic world of international trade and supply chain management.

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