Content area
Abstract
US companies in greater numbers have heard - and are heeding - the call to source products and parts overseas to reduce overall costs and compete more aggressively at home. A recent study by the Boston-based Aberdeen Group found that CPOs rate low-cost country sourcing (LCCS) a top priority over the next three years, and that companies plan to double their spending with offshore suppliers by 2008. The report also found that purchases from low-cost countries have average cost savings of 10-35% compared to US and Western Europe suppliers. While the LCCS road looks smooth on the surface and the cost benefits are enticing, there are potential problems for companies that do not properly prepare for all the possible hazards along the way. Some tips from industry experts on how to successfully implement an LCCS strategy are presented.