World watch, low cost country sourcing

In an increasingly globalised world, outsourcing operations to and sourcing products from a low cost country has become common practice and often delivers significant benefits. European and US companies plan to increase the sourcing of goods and services from low-cost countries, including India, by 85 percent within the next 2-3 years. They are attracted by lower costs for labour and infrastructure.

It pays to first gather thorough information about possible target destinations. Companies often fail to take account of the risks and challenges associated with outsourcing. Markets are growing and developing fast, especially after China's entry into the WTO and the Eastern European block's addition to the EU. Outsourcing to, sourcing from as well as investing in any of the low cost countries needs to be well thought out up front. Risks need to be managed throughout the whole process. Knowledge of the target market and its trends is the key to a successful strategy.

Supply chain change specialists State of Flux compile and analyse essential data for countries around the world on a regular basis. Please feel free to print out the image below for an overview of five of the top candidates for low cost country outsourcing and sourcing.

For a PDF version of this article please click on the following link: World Watch, LCCS

Facts and Figures 2006