- Cost savings is the prime reason enterprises engage in LCCS. Total costs for goods purchased from low-cost countries are 10 percent to 35 percent lower, on average, than costs in the United States or Western Europe.
- Enterprises source an average of 21 percent of their total spend from suppliers in low-cost countries, and they plan to increase that to 39 percent in three years.
- LCCS comes with significant supply challenges and risks. Longer supply chains, trade regulations, tariffs, cultural issues, poorly developed infrastructures and immature suppliers remain high risk factors.
- Most enterprises interested in LCCS have not developed well-thought-out strategies, and most are ill-equipped to undertake such an ambitious effort.
Additional Articles of Interest
secure your company's supply chain Supply Chain Security: Is Your Company Complacent or Engaged? Supply & Demand Chain Executive
tackling trade compliance issues Turning Global Trade Compliance Into a Competitive Advantage Supply & Demand Chain Executive
increasingly global supply chains August/September 2004 issue Supply & Demand Chain Executive
- Making Global Supply Chains Work Supply and demand chain practitioners take on the challenges and opportunities of world marketplace.
- The Hidden Costs of a Global Supply & Demand Chain - Veteran industry observers warn of potential hidden costs of offshoring.
- Mastering the Complexity Challenge in the Global Supply Chain - While many companies are acting globally, they are still thinking locally.
- Ensuring Security of Supply in the Lean Supply Chain - Balancing the demands of security with the requirements of today's lean supply chains
- The World Is Enough - Making the global high-tech supply chain more accessible.