Sourcing in the business world refers to several different procurement practices which all have the main goals of finding, evaluating, and engaging suppliers of goods and services.
Global sourcing is a strategy aimed at utilizing efficiencies in production on a global level. An example of this would be the importing of wholesale goods directly from Chinese factories.
When a US company imports wholesale goods directly from factories in China, the “Made in China” label must be prominently displayed on the product and/or the packaging. “Made in China” is one of the most common origin labels on goods imported to the US and can be found on a great range of products.
When a company engages in global sourcing from places like China, not only are manufactured goods imported, but also people and services can be sourced as well. This is known as personnel sourcing. Another type of global sourcing is the practice of acquiring low-cost materials from global markets; this is known as low-cost sourcing.
Sourcing goods and services directly from China works because of the expansion of the manufacturing infrastructure in China. The “Made in China” label can be found on many different categories of products in the US, from clothes and electronics to toys and even American-made cars and trucks. In fact, over 90% of the components of a new sport utility vehicle currently being produced by an American auto maker were made in China, and the vehicle itself is assembled there. This is a prime example of sourcing from China, where an American car company imports wholesale goods and services from Chinese factories.
Another example of China sourcing by American companies is the new Apple iPhone. “Developed in California” is written on the box; directly below that you can find the “Made in China” label.
The “Made in China” label refers almost exclusively to products made and assembled in the People’s Republic of China, usually on the mainland. Products sourced from other areas of the People’s Republic are generally labeled “Made in Hong Kong,” while imports from the Republic of China are generally labeled “Made in Taiwan.”