A New Partnership to Drive Direct Materials LCCS

I came across this announcement earlier in the week noting that UGS, A.T. Kearney, and Tata were banding together to drive low cost country direct material sourcing. By opening a joint center in India, the three partners plan to "find, develop and "on-board" companies from low-cost countries from which manufacturers and their suppliers can electronically source engineered machine parts." The partners will market the solution as the Asian Sourcing Network, or ASN (one wonders if this is an indirect poke at the Ariba Supplier Network, the other "ASN" in the sourcing world). For me, what's most interesting about the deal are not the partners or the offering, but the fact that the three players chose to locate the venture in India rather than China (certainly Tata played a role on this, but there’s more to it than that). The availability of superior engineering talent in India (relative to other low cost regions), not to mention the country's strong emerging supply base in metals and other categories most certainly played a role in the geographic decision.

Jason Busch

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