Many organizations operate in the global economy although some operate internationally without knowing it. Though operating internationally; domestic manufactures face a number of labor and social issues with their international suppliers.
The lead time of any order includes, credit issues, order processing, and the cycle of transportation. The detail includes; domestic manufactures suffer late deliveries from the manufacturers as a result of poor transportation channel or delay in the port due to poor documentation of the consignment and delivery forms.
Political problems are another factor a much risk that disrupts supply (Burt & Pinkerton, 2010). Some of The international suppliers may be located in a region of popular unrest and labor. This also results to late deliveries that in return affect business operations and customer service. This forces buyer constantly fears world conflicts and events. They are forced also to question the international suppliers on politics and how they can affect the supply.
A domestic manufacture will look on any hidden cost when buying any international sources which include exchange rates differentials, customs brokers, commissions, foreign taxes, packing and marking, and transportation cost. This may be a greater challenge when the purchase price is low but the cost of the process high.
The quality of the product brings a tremendous deal in any domestic manufacture. This is because of the fact that distance makes rejects more costly both in time and money David, Donald, Dobler, Sheila D, Sheila P, and Richard (2009) than they might be. In this case, buyers and suppliers agree on the quality requirements and material specification. Unless the materials inspected before shipment, the domestic manufacturer will suffer poor quality products and impact of low customers turn up is
It is essential for a domestic manufacturer to understand the cultural background of any given supplier; a significant factor to successful international supplier, Burt & Pinkerton, (2010). Professional purchasers must be careful, knowledgeable and careful about the country’s gestures, social strata, dress, foods and religious holidays. It is the buyer’s responsibility to understand and communicate these issues through out their organization as ethics in the business field. Culture and customs will promote business ethics; communication and transactions entered without any hurt.