Introduction: The Global Supply Chain
Businesses in all industries and markets have felt the impact of the recent contraction in the global economy. In the wake of the real estate market meltdown and subsequent financial fallout, spending and growth have practically evaporated from their previously bullish levels. As unemployment and uncertainty continue to linger over what continues to be a tepid recovery, demand for products and services is forecasted to remain weak over a prolonged period.
While most firms face top-line pressure due to a shrinking consumer base, exacerbated further by fierce market competition, management focus has shifted to the bottom-line with procurement being pushed to the forefront of corporate strategy. Since most supply bases have also been impacted by the recessionary environment, traditional procurement approaches are proving to be minimally effective. Hence, an increasing number of enterprises are developing newer and more innovative procurement strategies to position themselves for supply management success. One such strategy for businesses is to expand their strategic scope beyond familiar shores to capitalize on growing opportunities abroad through Low Cost Country Sourcing (LCCS).
Low Cost Country Sourcing has grown in popularity within businesses' management directives as an effective strategy to reduce costs across the supply chain. Although the slowdown in global spending had shrunk international trade, the flow of goods and services has begun to recover – supported further by unscathed free trade agreements and trade zones.