LOW C O S T

C O U N T RY S O U R C I N G

Growing C O N S U M P T I O N and increased consumer

D E M A N D S are driving a more I N T E R N AT I O N A L
approach to S O U R C I N G . Com panies are going
further and F U R T H E R A F I E L D in the hunt for the
L O W E S T C O S T suppliers. The task of the
P R O C U R E M E N T team is to rem em ber that
someti mes in L I F E , and in B U S I N E S S , you get what
you pay for. C H E A P E R may be better on paper but
what additi onal R I S K S do you need to account for?
LO W C O S T C O U N T R Y S O U R C I N G is m uch m ore
than the price of goods and labour. It requires L O C A L
K N O W L E D G E in every country. Are you prepared?

F O R MAN Y I N D U S T R I E S ,
PR OC UR EMENT
R E Q U I R E M E N T S F O R LOW
C O S T C O U N T RY S O U R C I N G
WIL L D O U B L E W I T H I N
THE NEXT 5 YEARS.

TOP DR IV E RS F O R LAUNCHING
LOW C O S T C O U N T R Y S O U R C I N G INITI ATIVES:

1
2
3
4
TO DELIVER
NEW SAVINGS TO COMPLY WITH
LOCA L R U L E S TO GAIN A CC E S S
TO NEW O R TO LOCATE
ALTERNATIVE BACKUP SOU RCES
PRO DU C TS AND DU RING SU PP LY
SUPPLIERS CHAIN
DISR U PTION S

Total Cost Reducti on by Product when producti on is

transferred from Western Europe to China

P R OD UC T TOTA L P O TEN TI AL
C OS T R ED UC TION

PRODUC TION CO ST 15-30%

TEXTI LES &

APPAR EL

PRODUC TION COST 15-20%

H O U SEW A R E S /
KI T C H E NW A R E

PRODUC TION COST 12-20%

I NJ EC TION
MOULDE D P L AST ICS

PRODUC TION COST 15-20%

E LE C TR ONI CS

T O P 5 M O ST S O U R C E D 1 NO N-FER ROU S,
COM MO DI TI ES F RO M S E MI-
LOW C O S T C O U N T R I E S M A N U FAC TU R E R S

2 CO MME R C IA L 3 IN D U S T R I A L
SERVIC ES M A C H I N E R Y AN D
E Q U IP ME N T

4 RAW 5 T E C H N O L O GY
MAT ER IAL S ,
FUELS

B E S T LOW C O S T W O R S T LOW C O S T
C OU NTR IES BASED C OUNT RI ES BASED
O N QUALITY, C O S T O N QUAL ITY, C O S T
A N D R E L I A B IL I T Y A N D R E L IA B I L IT Y

CHINA RU SSIA

C Z E C H R EP U BLIC ARGENTINA

HU NGA RY U KR A IN E

T H E B IGG E ST COMP LAIN T C H IN A MAY B E L O S I N G

A B O U T LOW C O S T I T S LOW C O S T
C O U N T RY S U P P L I E R S ADVANTAGE.
AND S OURC ING
P A R T N E R S IS T H E I R
LA CK OF P RODU C T L A B O U R C O S T S IN C H IN A
I N N O VAT I O N . T H E H AV E I N C R E A S E D BY 4 X
G R E AT E S T A DVA N TA G E S I N C E 2 005 .
I S T H E I R C O S T S AV I N G S .
CHINA’S WAGES A R E
CU R RE NTLY 10% OF THE
AVERAGE U S MANU FACTU RING
WAGE. THAT NU MBE R WILL
GROW TO 2 5 % BY 2015.

T O P 5 LOW C O S T
1 BANGLADESH
G RO WTH M A R K E T S

2 VIETN AM

3 TURKEY

4 INDIA

5 POLAND

WHAT C O M PA N I E S N E E D
TO S U C C E S S F U L LY S O U R C E
FR O M A LOW C O S T
C O U N T RY

WEL L-DEFINED W ELL-DEFINED ADEQUATE

STRATEGY S TANDA R DS FOR S U P PL IE R DUE
SU PPLIERS DILIGENCE

LOGISTICAL WRIT TEN SOM EONE WHO

E X P E R I E N CE IN CONT RA C TS K NOWS THE
IMPORTING AND REVIEWED BY LOCA L B U SINESS,
EXPO RTING AT TO RN EYS CU LT U RE AND
LANGUAGE

XC H A N G I N G H A S L O C A L
E X P E R I E N C E A N D C A PA B IL IT IE S
IN T H E F O L L OW I N G C O U N T R I E S

KEY: AREAS COVERED 21 LANGUAG ES: E NG LISH, FREN CH , GERMAN , ITALIAN, SPAN ISH , PORTU G UESE, POLIS H, MANDARIN,
CAN TONESE, FILIPIN O, HAKKA, MALAY, R USSIA N , ROMANIAN , JA PA NE SE, KOREA N, G REEK, SLOVENIAN,
ARABIC, CROATIA N & UKRAINIAN .

XC H A N G IN G ’ S LOW C O S T
CO UNT RY SO URC ING B E NE F I T S

COM PREHENSIVE LOCAL SUPPORT MITIGATE CO ST S AC CE L E R ATED

SU P P LI E R FOR SUPPLIER / R IS K A ROU ND ‘CHINA + 1’
IDENTIFICATION QUOTATIONS NEW SU P P LI ER S U P P L IE R
& QUALIFICATION DEVE LOP MENT STR ATEGY
SE RVI CES

LOCA L SITE LINGUISTIC E NHA NCED R EP OSITO RY

AUDITS AND CAPABILITIES P R ODUC TIVITY F O R A LL
REVIEW TO (21 / COST EF FE C T ACTIVITY – BUILD
E N S U R E RA PID LANGUAGES) CAPACITY YOU R ‘LOCAL’
IMPLEMEN TATION AND 24 MAXIMISATION INTE LLEC TUA L
HOUR P RO P E RTY
SUPPORT

X C H A N G I N G ’ S in-depth strategic sourcing process

ensures im plem entable S AV I N G S and reduced R I S K

1 2 3 4 5 6
P R OF I LE SELECT I D E NT I FY P R E - QUALI F Y SELECT eRF
S O U R CING S OU R CI NG S U P P LI E R L I S T S UP P LI ERS E XECUTI ON P
C AT EG O RY S T R ATEG Y P L AN

18% O F EMEA E V E N TS IN THE PA ST 6

M O N T H S I N CLU D E D A PA C S U P P L I E R S
WITH AV E R A G E S AV I N G S O F 2 1 %

SAVINGS: 12%
TOTAL SPEND

SAVINGS

SAVINGS: 32%
SAVINGS: 12%

EURO TOTAL S P E N D :
USD T O TA L S P E N D :
GBP TOTAL S P E N D :

€6,311,105 $30,253,807 £ 3,905,730

S AVI N G S: S AV I N G S : SAV I N G S :

€2,019,872 $3,522,982 £459,528

€ $ £

X C H A N G I N G Procurement helps customers prepare

for and implement the change to LOW C O S T C O U N T R Y
S O U R C I N G . With over 1 , 0 0 0 procurement specialists
on the ground, we use L O C A L R E S O U R C E S with
L O C A L K N O W L E D G E of markets and suppliers to
I N T E R R O G AT E your entire value chain. By viewing the
world as a G L O B A L M A R K E T P L A C E , we enable true
GLOBAL SOURCING .

O UT SO URC ING & P R O C U R E ME N T SOFTWA RE

CO -SO URC ING A S A S ERVIC E A S A S ERVIC E
S2 P | S2 C | P2P |
TAIL TE CH NOL OGY S TA T E O F T H E A R T
M A N A G E D S E R VI C E S O LU T I O N S WI TH ON - TE C HNOL OGY
SO LU T I ON S DEMA ND S E R V I C E S

SO U RCES :
htt p://www.accent ure.com /S it eC ollecti onD ocum ents/PD F/l ow_co st.p df
htt p://www.just-style.com/management-briefi ng /whats-happening-with-sourcing_id120347.aspx
htt p://www.strategyand.pwc.com/global/home/what-we-think/reports-white-papers/arti cle-display/best-cost-country-
sou rcing-next #p rett y Photo [ifram es]/0/
htt p://www.autom oti velogisti csm agazin e.com /ne ws/china-may-m att er-less-as-a-low-cost-cou ntry-sourcing-locati on
htt p://www.sdcexec.com/arti cle/11327185/read-about-the-key-factors-that-are-expected-to-push-the-low-cost-pendulum- away-
from-china
htt p://www.forb es.com /sites/allbusiness/201 4/0 1/3 0/8 -co mm on-mistakes-u-s-compa nies-m ake -when-sourcin g-goods-
and-suppliers-in -china/