Supply Chain Solution No.3 – Low Cost Country Sourcing
Define a low-cost country sourcing plan that delivers cost reduction and meets quality objectives. Business typically gain a 10-35% cost savings through low-cost country sourcing. China has been considered the go-to country for the lowest pricing and acceptable quality for 20+ years and will continue to be for another 5+ years due to its wealth of raw material, technology and infrastructure.
However, businesses for the last several years have been mitigating risk to other low-cost country destinations such as Bangladesh, India, Indonesia, Vietnam, Cambodia, Myanmar and Africa for alternative low-cost country vendors, as labour and margins in China slowly appreciates.
As the face of global trade changes so do trade agreements change and supply channels. Understanding the total cost of ownership from vendor price, payment terms, logistics and tariffs are essential to identifying which low-cost country suits your market.
Crucial success to global sourcing lies in doing due diligence in advance. Have a vision, comprehend what price you need and quality standard, brand and product requirements and timeline that will fit with your overall strategy.
ID Global Concepts are experts in supply chain management. We add value to your supply chain through consultancy or management contract to ensure the business has the best practice systems that are the right fit for your business, customer and meet your value expectations.