The initial concept of global sourcing is to reduce cost overheads inherent to production and labor process. However, even in global sourcing, the need to reduce carbon emission has been on the forefront as companies strive to achieve higher ideal in their production process. Being sustainable in a global context requires a mix of strategies that will enable a company reduce cost while increasing profitability.
The first benefit of global sourcing is increase in a company’s sense of social responsibility (Rommahan 34). The term social responsibility holds a lot of weight because it considers several elements. First, the reduction in carbon emission leads to better air quality, which reduces the likelihood of developing malignancies that are related to poor air quality. Currently, the social systems are increasingly becoming aware of the challenges of air pollution including susceptibility to developing medical problems. This has made individuals and factions to become vocal demanding companies to reduce carbon emission and develop efficient production systems.
According to Christensen et al. (14+), sustainability on a global front leads to a reduction in cost. For instance, many companies invest heavily in commercials and other forms of advertisements. However, when a product is manufactured under favorable conditions, a strategic advertisement capturing environmental concern becomes far reaching and woes more customers to make purchase of the product. This reduces advertisement cost, which leads to an overall reduction in associated costs. A huge amount of research has shown that cost reduction by application of sustainable strategy is achievable.
When cost of production goes down, the amount of revenue increases leading to better profitability for the company (Christensen et al. 14). Another contributing factor to better revenue collection is that the company acquires a better public image (Christensen et al. 14). A good image leads to better company reputation, which compels people to purchase products even when they are premium priced. This means that a company can adopt a multivariate pricing strategy that captures the concept of sustainability.
Sustainable global sourcing means that companies consider the health of the natural environment (Rogers 11). When a company holds a sustainable sourcing record, it means that the company cares for the environment of its global sourcing destination. The company recognizes that the natural environment is the same and when one part of that environment is damaged, it effect resounds throughout the world. The concept of the universe being conjoined is entwined in their decision, which acts as a sign of the company’s responsibility of the natural environment. This leads to energy reduction while at the same time increasing energy efficiency (Rogers 12). This leads to reduction in energy consumption while being able to achieve better results from these energy reductions.
A sustainable global...