Ingersoll rand is considered as the global industrial company that is diversified and was formed in 1905. From the merger of Ingersoll- sergeant Drill Company and Rand Drill Company it has become the famous Ingersoll-Rand company. Main headquarter of this company is in Davidson, North Carolina and it is incorporated in Dublin, Ireland. It has more than 99 manufacturing facilities all over the world. Michael Lamach is the CEO of this company. Main products that this company produces are air solutions, tools, golf cars, utility vehicles, transport refrigeration, commercial air conditioning and many more. In this report also there are many challenges that this company is facing while sourcing material for the products and services and these challenges has described in detail and proper suggestions to overcome these challenges have been discussed in this report. Beside that best recommendation for the company has also been discussed in this report.
Challenges Faced By Ingersoll Rand
There are many challenges that company has to face while sourcing materials whether domestically or internationally. Many factors like political, legal and cultural differences affect the implementation of global sourcing for the organizations. Besides these factors companies face challenges in the transportation of goods, technological sector and in the production of material. Many a times it is difficult for the company to source globally as language barriers, customs and trade regulations does not allow sourcing. There are some challenges that are faced by the Ingersoll rand in the global sourcing:
- The challenges that are faced by a company in sourcing globally are linked with the outsourcing risks. This company usually outsources material globally so there is always a risk of the confidential information leaking that affects the competitive advantage of the company in the negative way.
- Other challenge that is faced by this company is international logistics.When the products or services are transported globally there is always a risk in the reliability as logistics networks are not always in favor of the company as in the home country and this turns into the unexpected delaying of the products and services.
- This company also faces challenges in the cost savings as many a times reduction in the cost has turned out to be not so great for the company.
- Security risk is also a challenge as Ingersoll rand opts for the low cost of sourcing the products globally that gives the company political uncertainty or may be internal political turmoil.
- Due to the different cultures of the company and the different time zones, this company has to bear some hidden costs when they want to source globally. Beside this cost when they source globally there is monitoring of the global manufacturers that also adds to the cost for the company.
- Sometimes when the products and services are source globally or internationally, it can lead to the quality problems is it is not managed properly which further affect the brand name of the company and this will ultimately cause a financial penalty.
Options to Overcome
- Challenges regarding the quality of the product can be overcome by selecting the best kind of raw material for the products and then best production method should be used which matches with the international standards so that the product turns out to be the best. And finally testing should be done so that there is no chance of mistake in the making of the product. This testing will also help in assuring the production quality.
- To overcome the cultural barrier there should be familiarity with the social and the business culture in order to source material for the products and services.
- There should a clear communication with all the departments from where raw material is sourced so that company does not have to face any difficulty in the further process of supply chain.
- There should be a proper understanding of the technical aspects for the products and services that has to be sourced so that process does not stop in the middle and company does not have to bear extra costs.
- In order to reduce the cost that a company bears, identification of suppliers should be in the low cost regions so that cost of the company and even the products can be reduced.
Best option for this company to overcome the challenges is to have proper knowledge about the resources they are sourcing from different locations. Every worker of the company should know about the company and the methods they are using to source the material. Before sourcing the material from outside the country they should know about the language, politics and culture that create a barrier in sourcing the material. All the extra charges this company is bearing should be stopped by having knowledge about the marketing and finance of the company. To overcome all the issues that this company is bearing, strategies can be formed to forecast the future so that issues do not take place and company can grow successfully.
From this report it can be concluded that Ingersoll rand has faced many challenges while sourcing the raw material for the products and services they provide to the customers. These challenges affect the company and the success of the company. So it is very important for the company to overcome these challenges and find suitable solutions for the challenges. In this report many suggestions are given that help in overcoming the challenges and with that best option is also provided for the company. Further many recommendations are also provided in this report that help in the betterment of the company and these recommendation will also help the company to forecast their needs and then move accordingly to that.
- When there is sourcing of raw materials form outside the company, there should be proper knowledge about the country which includes the market, culture, politics and every such factor that can create barrior in sourcing the material.
- Quality of the raw material should be checked as it can affect the whole of the product which will have direct impact on the reputation of the company.
- Standards should be made for every raw material that is sourced for making the product and these should match with the standards. Due to this there will not be any issue in the raw material and further in the process.
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