Asian Sourcing Network Launched to Facilitate Low-Cost Country Sourcing

UGS, A.T. Kearney Procurement Solutions and Tata Consultancy Services open center in Coimbatore, India, to focus on engineered machined parts

UGS, A.T. Kearney Procurement Solutions and Tata Consultancy Services open center in Coimbatore, India, to focus on engineered machined parts

Chicago — March 7, 2006 — A.T. Kearney Procurement Solutions, a global sourcing services firm, and UGS Corp., a global provider of product lifecycle management (PLM) software and services, have launched an initiative designed to enable manufacturers to connect companies from low-cost countries to their global innovation networks through a first-ever joint solution of information technology, software and consulting services.

Calling the new joint solution the Asian Sourcing Network (ASN), the companies are teaming with Tata Consultancy Services (TCS), a information technology and engineering services organization, to open the first ASN center in Coimbatore, India.

Through the ASN center, which the companies opened on March 4, the three companies said they will find, develop and "on-board" companies from low-cost countries from which manufacturers and their suppliers can electronically source engineered machine parts. ASN will provide companies with a local presence, which can be critical to the success of low-cost country sourcing activity.

"Identifying and building effective long-term relationships with the right low-cost suppliers will be a distinguishing characteristic of leadership companies going forward," said Joseph Raudabaugh, president of A.T. Kearney Procurement Solutions. "Finding, developing and on-boarding these key suppliers and getting them fully embedded into supplier-partner networks is critical."

"ASN combines the extensive supplier research assessment and negotiation capabilities of A. T. Kearney with the collaboration, content exchange, and sourcing enablement of UGS technologies and the far reaching business experience and recognized quality services of TCS to offer low-cost country sourcing as a packaged solution," added Raudabaugh.

Maximizing Global Innovation Networks

The ASN targets the increasing need for manufacturers to tie low-cost country suppliers into their global innovation networks to help reduce cost. According to the Aberdeen Group, the leading provider of fact-based research and advice for the global technology-driven value chain, medium and large enterprises expect to double their average spend in low-cost countries from approximately 20 percent in 2005 to 40 percent in 2008.

The new category-specific ASN center, focused on engineered machine parts, will include 100 dedicated collaboration workstations, engineering support and supplier development services. The center will initially target over 400 small and midsize enterprises (SME) that provide machining services.

"The ASN represents a major step forward in enabling companies to leverage global innovation networks by establishing the local presence critical to the success of low-cost country sourcing activity," said Raj Khoshoo, vice president of strategic initiatives at UGS. "The fusion of technology, services, content, data integration and best practices deployment is a logical extension for existing UGS Teamcenter customers. In addition, both existing and new customers will reap benefits including improved process coordination, reduced travel demands and radically enhanced supplier performance."

"This initiative by A.T. Kearney Procurement Solutions, UGS and TCS will enable the global manufacturing industry to achieve desegregation of their value chain and restructure their supply chain to include global suppliers based on the selection criteria of an optimum combination of capability and cost," said Dr. Ravi Gopinath, vice president of engineering and industrial services for Tata Consultancy Services. "TCS' extensive understanding of the manufacturing industry puts it in a unique position to make this initiative a big success. TCS is committed to enhance the competitiveness of the manufacturing and SME sector in low-cost countries through supply network management and guiding continuous improvement cycles."

The three companies said that ASN focuses on addressing both classical sourcing needs, such as supplier identification, supplier assessment and evaluation, and sourcing negotiations as well as providing for critical process and supplier management requirements, such as supplier participation through "global" collaboration to enable key operational processes, for example, quality monitoring, engineering changes, and inter-company teaming.

In addition, the three solution providers said that ASN will provide supply market transparency in low-cost countries; in-country engineering services support; technical capabilities mapped to support requirements-driven sourcing analytics; version control and tracking of all inter-company documents and communications; joint project management and issue tracking; and configurable workflows and performance tracking.

Additional Articles of Interest

— Read about the five phases of global sourcing that, if followed, allow an organization to implement a successful global sourcing strategy in the short-, medium- and long-term. See more in "Making Global Sourcing Work," only on

— Visibility and product quality are key to maintaining a competitive edge in the market. So how can a company successfully achieve those objectives while also outsourcing its manufacturing? Read "Quality Management in Outsourced Manufacturing," an In Depth exclusive.

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