Global procurement

Once again global procurement has hit the headlines as yet another fire in a clothing factory in Bangladesh claims the lives of workers.  The media make much of so called ‘Western’ companies buying cheap and thus apparently endangering the lives of workers.   In my view it’s not the global buying model that is broken but the lack of care and on-going attention given by the buyers to the status and functioning of the company from which they are going to buy.   

No brand does well out of media stories that it buys cheap clothes at the expense of peoples’ lives.   Written assurances are one thing but nothing beats unscheduled site visits for getting at the truth of the situation.

Is it really true that ‘Western’ buyers or the companies that they work for are so into penny pinching that they will not fund proper global procurement and prefer to take the risk that the next disaster will not implicate their brand?



www.morley-consulting.co.uk

Country confusion

Almost all shipping documents mention the countries of origin and destination (I say almost all because I have seen shipping invoices with complicated addresses that somehow missed off the country altogether!).   

Most adults would tell you that the country of origin was where the goods came from and the country of destination was where they were going to.   

Ask some school children where things come from and they will tell you the name of the local supermarket!

Ask a procurement person and they will probably tell you the origin was the country from which they bought the goods.  

But in the world of Customs, origin means the country where the goods were actually made and in today’s global market that does not necessarily mean the place they were bought nor does it mean the place where they were shipped from.  Documentation does not always make this clear.  Of course items that were assembled in several different countries bring their own special issues!

Why does it matter?

Some ‘origins’ can confer a significant discount in import duty and tax if certain criteria are met.

So next time you glance at a document and copy down the ‘origin’ of the goods you might pause to wonder if you are wasting an opportunity to save money.

www.morley-consulting.co.uk