Global firms to up sourcing from India

Supply Management Institute to organise first sourcing summit in Bangalore.

With the aim of raising awareness on India as a sourcing hub for global firms in different sectors, the Supply Management Institute (SMI) in partnership with the Indian Institute of Management "" Bangalore (IIM-B) is organising their first India Sourcing Summit in Bangalore.

The two-day summit scheduled to begin on February 8, is expected to see a participation of representatives from over 150 global firms, the organisers said here on Friday.

In a flat world, global firms prefer sourcing materials from cheaper and cost-effective destinations without compromising on quality of the goods they are procuring. India is fast emerging as a hub for global sourcing not only for IT or ITeS, but also in traditional sectors like apparel, automotive, special chemicals and electronic components.

According to a CII-McKinsey report, the sourcing of electronic components from India is expected to touch $15-18 billion in 2015 from $1.25 billion in 2005.

The report also says sourcing of apparel from India is expected to be in the range of $25-30 billion in 2015 from $6.1 billion in 2005, and auto-components to be $20-25 billion from a mere $1.1 billion in 2005. The sourcing of special chemicals which was of the order of $1.6 billion in 2005, is expected to reach $12.15 billion in 2015.

At a time when sourcing occupies the top priority of lot of global firms, India will remain in the forefront before they go in for global sourcing being a low-cost destination; relatively safer place for IP protection, language capabilities and know-how of the people regarding the requirements of global sourcing.

"Sourcing is global and international business. This will change the dynamics of doing business in future. However, Indian firms need to undertake steps to meet the scale of the Chinese firms, and groom talents in sourcing and supply chain management to stay competitive in the game," said Constantin Blome, secretary, Indian Sourcing Summit.

Many a global firms have recently come out with their sourcing from India. Auto major BMW has recently opened its international procurement office in Gurgaon.

EADS, a major player in aerospace and defence, has opened its sourcing office in India, apart from sponsoring a chair for sourcing and supply management at IIM-B.

According to Bolme, who is also the EADS-SMI Endowed Chair for Sourcing and Supply Management, German auto majors are now aggressively looking at India as a major supply base of auto-components, after the success of Japanese auto manufacturers. This would create enormous opportunities for students in India, to pursue career in sourcing and supply chain management, he added.