Low-Cost Country Sourcing

While often the prime driver of global outsourcing initiatives, low cost is just one important reason for globalizing your supplier base. A few more important strategic factors include:

• Creating more customer value for overall spend
• Penetration of new growth markets
• Access to global talent and innovation
• Alignment of procurement strategy to long-term corporate strategy

At the same time, low-cost country sourcing presents some thorny challenges. Some locations may offer attractive pro forma savings — through reduced production costs — but the total cost might, in fact, be higher. 

Overseas transportation, currency fluctuations and import duties can quickly erode the benefits of low production costs and labor rates. Unstable or ineffective regulation and unreliable suppliers or logistical issues can spike expenses, hurt product quality or even damage company reputation. 

To learn more about sourcing smart in low-cost markets, contact us today.