Going global has potential, but beware pitfalls
January 19, 2004,
Diligence and attention to myriad details are integral to success in global sourcing. But even as the manufacturing side of the home furnishings business moves offshore, there are many opportunities for American suppliers to do global business.
Invista, which markets its Teflon, Lycra and other brands globally, puts its own people in the joint ventures it has around the world to ensure equal systems and standards. But, she added, other challenges like different growth-rate objectives come into play.
Amy Bell, executive vice president of Ashford Count, another panelist and a fairly recent offshore sourcer, pointed to some of the challenges. "There's a quantity issue — you have to be a big hitter," she said.
In her case, this means 60,000 units, obviously a pre-sold order. Other challenges are timing, freight and design capabilities, she said. But the latter, Bell noted, is changing at lightning speed from 18 months ago.
Larry Liebenow, president and CEO of Quaker, noted that his company — a global marketer — sells to 45 countries with a dedicated offshore sales force.
Quaker's success is because the company is product driven, with a $20 million annual product-development budget, he said.
Liebenow, another panelist, also sees change in trade issues happening in the future. He cites the success of the United States only free trade agreements — with Mexico, Canada and Chile — and is anticipating important benefits from CAFTA and the potential for an all-Americas agreement in '05.
The United States, he emphasized, has to be more diligent in obtaining access for U.S. goods in other countries, especially if those countries' goods are allowed into the United States.
Sharon Bosworth, vice president, upholstery for Thomasville Furniture, pointed to a key reason for offshore sourcing. "It's an imperative in providing U.S. consumers with price/value products."
As for maintaining standards, Bosworth cited the "state-of-the-art facilities" in China that are regularly inspected.