Overseas sourcing
Value of international collaboration: overseas sourcing of wooden furniture from Thailand for a multi-national supermarket chain. Overseas sourcing presents particular challenges in relation to workplace learning, some dimensions of which are explored here.
As a result of consumers demanding more choice, UK companies are being driven to seek more diverse products from all around the world. A small company, based in Thailand, supplies Tescos UK with wooden items. This is beneficial for Tescos because the price is competitive and the quality of the wood is good. The relationship is also beneficial for the small company because they were formerly a domestic manufacturer, whose methods were highly labour intensive and used only light engineering skills. As a result it was very vulnerable to rising labour costs as the Thai economy grew. Their solution was to develop design capabilities, to aim for higher margin furniture products and to build export markets. The company has never had a formal contract with Tescos – they rely on an informal guarantee, based on ‘the Tesco name’. The company learns from the international collaboration and it reaches the retailer's standards through the process of quality control audits that are now more formal. They take place in Thailand and focus on the conditions of the workers and the condition of the products.