Best Cost Country Sourcing

It seems that every month or quarter, there's a new buzzword used to describe sourcing globally. Low cost country sourcing. Global sourcing. Competitive country sourcing. The list goes on. I'll let you have your pick on what name to choose for your own organization (but only if you can promise to save some bucks on a total landed cost basis, not identified savings ;-). But now the choice might be even more complicated, as the notion of Best Cost Country Sourcing (free link, no registration required) is rising to the forefront as well. Incidentally, this is not a new topic or phrase, although it seems to be making the rounds quite a bit of late, as evidenced by a new piece by BrainNet posted on European Leaders site. In it, the authors discuss how various dynamics impact Best Cost Country Sourcing decisions and results -- and how few companies have a true picture not just into the costs and risk of such activity, but even the true savings potential to begin with.

Consider how Western organizations may look to reallocate their sourcing mix as productions moves "nearer to the consumer who is still located for the most part in Europe and the US." In this scenario, "even Africa comes into play as certain countries in Africa are being used as a so called 'Low Cost Country' for Asia, in particular China. The investment of China in Africa is increasing day by day and politicians are worried about the market coverage that China is getting in strategic regions." Aside from a thinly veiled pitch at the end to hire a consulting firm to come in and help your organization build alignment for its sourcing plans, the article is a good starting point for organizations who are beginning to think through their next wave of global sourcing efforts. And it also shows how consultants are always good at coming up with metaphors which you'll be sure to repeat inside your own organization.

Jason Busch

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