Article published in the Handelsblatt supplement, 14th November 2005     

The Profit lays in the Purchasing

Why international procurement can sustainably increase the competitive ability of medium-sized businesses.

Internationalisation is still a one-way street in most medium-sized companies: While production sites are being relocated abroad and the sales and marketing department is also operating on an international level, purchasers often only move in national or even regional circles. “Around 80 percent of small and medium-sized businesses purchase their goods and services from their own post code area,” writes Gerd Kerkhoff in his new book “Global Sourcing: Opportunities for the Future”. Established supplier relationships are too seldom or even never put to the test, let alone compared on an international level.
A dangerous inactivity in view of the potential savings of global sourcing, which the consultant estimates to be at around 40 percent. “You can assume that companies who do not extend their procurement activities to international markets will no longer be in a position to compete in the next three to five years,” says the manager and founder of the procurement optimising specialist consultation company, Kerkhoff Consulting in Düsseldorf. Global sourcing offers a multitude of opportunities:

Cost reduction. Using other cost structures, international suppliers can frequently offer their goods for less than home suppliers. But just considering the cost price is not enough. The total costs of ownership are interesting. An amount, which also takes into account all additionally arising costs, such as the logistics or the costs for customs formalities.

Competition among the suppliers. The larger selection of suppliers improves the company’s own ability to negotiate with existing and potential suppliers.

Optimisation of quality. Classic global sourcing regions such as China , Eastern Europe and India have caught up in terms of quality and can now hold their own with European standards. This can also cause a clear inducement for German suppliers to adjust themselves, whether in terms of price or quality.

Increased spreading of risks. Internationally procuring companies are no longer dependent on the developments of national markets and can react more flexibly to regional factors, such as strikes or delivery bottlenecks.
Development of new outlets. Through the intensive activity with the economical and sociocultural features of a potential procurement country, leads for new sales countries can often be gained. A series of risks accompany these opportunities. For example, longer delivery times, communication difficulties, political and economical imponderabilities, increased demand on logistics, currency risks as well as different legislation. The wrong assessment of these risks can cause wrecks for many medium-sized companies in their international efforts or prevent them from coming to grips with such activities at all. Global sourcing means more than just putting the purchaser on a flight for China . It is a strategic approach and, in many companies, requires rethinking as well as implementation of strategic procurement management with close links to the company management. This is the route that Interroll Engineering GmbH in Wermelskirchen took. The company, specialising in materials handling equipment restructured its purchasing department during a project for procurement optimisation and split it into an operative and a strategic unit. “The strategic procurement manager is freed from all operative tasks of order handling and can concentrate solely on his core competences,” says Interroll manager, Armin Lindholm. These tasks are predominantly research on new procurement markets and suppliers, supplier assessment and regular examination of existing supplier relationships. The basis for this work is a significant database. And anyone who cannot master the necessary research process for global sourcing on their own account, particularly at the start of international procurement activities, should fall back on the knowledge of service providers. For example, Kerkhoff Consulting, who have on-site consultants in many countries, providing them with information about the special features of the different markets, accompanied the project at Interroll Engineering GmbH. This meant the Group’s already international portfolio of suppliers could be expanded to include capable suppliers. Much to the surprise of Armin Lindholm, “We would never have thought that there were so many interested suppliers for our requirements throughout the world.”

By Ulrike Lach

Financial Times Deutschland, 31st May 2006

TOP TEN ECONOMIC BOOKS IN GERMANY
Global Sourcing: Opportunities for the Future

Purchasing expert Kerkhoff shows what opportunities are located in international procurement and how companies can use these opportunities.

Gerd Kerkhoff
Wiley-VCH, 2005, 239 pages, 39.90 €
ISBN 3-527-50196-7

Article published in „Capital“ No. 26, 08.12. – 21.12.2005

The Learning Effect

The world of the economy offers an abundance of material for many stimulating hours of reading. Whether enthralling biographies, studies or thrillers: the learning effect is guaranteed with the new publications.

Menus and city maps – for an author of economic books, this research material is rather unusual. When Günter Ogger started work on his latest book, he actually had a very different idea. He wanted to write a fact book. The author got on the trail of the boss of a prognosis institute, who manipulated the foreign exchange markets with his investment advice. However, threats with a ruinous lawsuit forced Ogger to back off from further demands. So, he came up with the idea for a thriller plot and enriched his first novel with authentic details: “the reader travels a lot and can check everything – so every detail must be right.”
But even in the field of fact books, exciting stories are in demand. So, the former Volkswagen boss, Carl H. Hahn told of his strategies and decisions. Even the rise and fall of department store king and founder of a mail order firm Josef Neckermann provides captivating reading material. The public can draw their own conclusions from the successes and wrong decisions of entrepreneurs. Scores of active insiders from economy are focussing on the learning effect. Whether a consultant writes about the chances of globalisation, psychology professors penetrate the inner workings of management or the communication boss of the Siemens Group compares his assessments of current discussion topics with the outer view of writer Burkhard Spinnen. The economy is providing motivating reading material in droves. Even those who are still looking for Christmas presents can grab hold of the current new releases.

Global Sourcing: Opportunities for the Future,
Gerd Kerkhoff.

Entrepreneur and consultant Kerkhoff defends the purchase of products and services in low-wage countries to ensure competitiveness and work places in Germany . He presents four purchase markets: China , India , Turkey and Eastern Europe . He provides concrete recommendations for the invitation to bid, procurement and design of contract. Practical behavioural guidelines and arguments against globalisation critics.

Gerd Kerkhoff
“Global Sourcing: Opportunities for the Future”,
Wiley Verlag 39.90 Euro

Article published in Venture Capital Magazin, 1/2006, page 64

Just Published

Globalisation – often generally equated with a reduction in work places and increasing competitive pressure. The fact that there are also chances to secure work places and increase a company’s own business and competition situation concealed behind this is what Gerd Kerkhoff wants to show in his new book „Global Sourcing: Opportunities for the Future. The author describes clearly and practically how professional global sourcing also prepares development and quality abilities in addition to commercial revenue potential. These abilities can be put into affect by using high-capacity international suppliers. A handbook for all those companies, who want to deal critically with the subject of “global sourcing”.

The book is published by Wiley-VCH Verlag and costs 39.90 Euro.

Review published at www.getabstract.com      

getAbstract – The world’s largest online library for book summaries accepts book assessments referring to the criteria of practicability, innovation and style. Global Sourcing: Opportunities for the Future obtained an overall assessment of 8 out of 10 possible points and is number 1 (on 04.05.2006) of the most frequently used summaries.
 
The book provides information on the following

•  Which chances and risks are offered by international procurement,
•  ow to go about finding the best suppliers, and
•  hich products are particularly suitable for global sourcing.

Recommendation
Global sourcing is not the same as outsourcing; Gerd Kerkhoff emphasises this in his book several times. On the contrary: Those who buy good quality at low prices from all over the world can save costs and invest the revenue in providing domestic work places. That sounds plausible, particularly from the perspective of the purchasing company. However, what happens to the domestic suppliers, who have previously abandoned themselves to the traditional “local sourcing” and now are suddenly losing their customers? Kerkhoff provides no conclusive evidence for his thesis that global sourcing creates plenty of new work places. The attempt to combine a book about maximal revenue increase through cheap as possible purchasing with the maintenance of cost-intensive jobs corresponds with the proverbial square peg in the round hole. Nevertheless, the author offers practical advice to all those who want to profit from the chances of the globalised world economy in their purchasing strategy. Kerkhoff falls back on a wealth of experience which he has collected from all over the world with his consultation company. Advertising for his own services are not thin on the ground wither. getAbstract recommends the book to companies and senior purchasers who are looking for new routes to profit increase.
 
About the Author
Gerd Kerkhoff is the founder and partner of Kerkhoff Consulting GmbH, which has specialised in the improvement of procurement activities and is represented by branches in China , India , Malaysia , Austria , Poland and Turkey . With his first book “The Bermuda Triangle of Business Procurement”, the author has already written an economics bestseller.

Article published in Industrie Anzeiger No. 1-2 / 2006
dated 09.01.2006 page 40, rubric: Service, title: books

Global Sourcing: Opportunities for the Future

International procurement, for example in Eastern Europe, China, India or Turkey, does not just provide the opportunity to lower purchasing costs by 30 to 40 %. It also provides the chance to sustainably ensure the competitive ability of the company. However, without substantiated knowledge of the particularities of these markets, global sourcing can be an expensive pitfall. This book wants to provide relief: it presents the procurement markets mentioned above and their strengths, explains which goods and services are suitable for global sourcing and shows, with the aid of practical examples and advice, how new revenue potentials can be tapped into using international procurement.

Article published in “Der Zuliefermarkt” Edition 05/8

Book: Lower Procurement Costs with Global Sourcing

In the book "Global Sourcing: Opportunities for the Future" (ISBN 3-527-50196-7), Gerd Kerkhoff describes how companies can lower their procurement costs by 30 to 40 percent. The book with 230 pages provides an overview on the most important global procurement markets and shows how the many pitfalls can be overcome in the international purchasing arena, using case studies and checklists.

Article published in “Maas Rhein Westfalen Zeitung”,
dated 24th January 2006

Books
Global Sourcing: Opportunities for the Future

It is common knowledge that successful competitive companies such as Nike, Puma and Adidas have almost all their products manufactured abroad. And the rule for these three giants can also apply to medium-sized European companies. To remain competitive, they must use the international market. While the international outlet market was the focal point, international procurement was neglected. According to Gerd Kerkhoff, managing partner of Kerkhoff Consulting GmbH, this offers huge potentials to the majority of companies to lower their purchasing costs, thus securing work places in their own country. In his book, the author provides an overview of the most important global procurement markets and, using case studies and checklists, shows how the many pitfalls in the international purchasing arena can be overcome.