2007 Low-Cost Country
Sourcing Report
185 procurement professionals
responded to the recent eyeforprocurement survey - senior executives
from manufacturers, retailers and 3PLs operating in various industry
vertical. Based on the responses to the survey, it is evident that
while sourcing in low-cost countries is certainly a viable proposition,
there are a number of issues that are sometimes not apparent at
the outset. The eyeforprocurement 2007 Low-Cost Countrt Sourcing
report examines the key drivers for sourcing in low-cost countries,
as well as the risks involved. The report also compares the findings
with the last year’s research.
Just over half of the respondents cited “lower labour costs”
as their primary reason for sourcing in low-cost countries, and
43% said lower material costs is a major reason. The gap between
these two drivers has widened since last year’s 48% and 47%
respectively. A third of the respondents are under pressure from
customers to reduce prices, compared with 42% last year. The percentage
of respondents sourcing raw materials in low-cost countries has
dropped from almost half last year (48%) to just over a quarter
this year (27%). Less than 20% use low-cost countries as a source
of IT, information & research and other commercial services.
Almost half of all respondents cited “trade regulations”
as the biggest obstacle, compared with 37% last year. The biggest
positive change since last year’s survey is “poorly
developed infrastructure”, with this being an obstacle for
less than a third of the respondents, compared with almost half
last year.
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