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              Home | Global Practice Lines | Low-Cost Country Sourcing

              Low-Cost Country Sourcing

              Supply Chain, Strategic Sourcing, Procurement, Savings
              Supply Chain, Strategic Sourcing, Globalization, Asia, Low Cost, Process

              The pressure to reduce costs has accelerated the need for businesses to leverage offshore suppliers.

              Today, it’s not a matter of whether your company will source globally but rather, how best to do so. Even if your company has been sourcing from China for years, “How do you know if you’re getting the best deal?” Gibson Consulting’s experience along with its local resources will provide an all-inclusive approach to help companies develop their international procurement strategy. This approach will also aid in implementation; from testing the waters to truly harnessing the global advantage.

              The L.C.C.S. Process

              Supply Chain, Strategic Sourcing, Scope of Work, Identification   1) Scope of Work
              • Lead buying location identified, and Sourcing Advisor is assigned to match location of buying lead
              • Sourcing Advisor conducts interviews with buying team
              • Sourcing Advisor documents all of the key objectives of buyer:
                • - Component type
                • - Secondary operation requirements
                • - Low Cost Country need
                • - Critical requirements
                • - Savings goals or objectives
              Supply Chain, Strategic Sourcing, Data Collection   2) Data Collection
              • Data is collected and verified for project including:
                - Part information - Shipping requirements
                - Pricing - Drawings
                - SKUs - Standard T&C’s
                - Supplier qualification requirements 
              • Obtain input and analysis from Commodity Manager team (L.C.C.S. region targets, key success factors)
              Supply Chain, Strategic Sourcing, RFQ Development, Profile   3) RFQ Development
              • Build draft of RFQ/RFI
              • Load information (drawings/specs) into profiles
              • Obtain customer approval of RFQ
              • Post RFQ to web-based system to be distributed to approved supplier lists
              • RFQ is prepared for any local distribution requirements
              Supply Chain, Strategic Sourcing, Supplier Identification, Profile   4) Supplier Identification
              • Match project and customer requirements to the profiles in the supplier database
              • Select top suppliers in appropriate regions for the project
              • Conduct additional research, especially in low cost regions to recruit suppliers
              • Obtain customer approval of target supplier list
              Supply Chain, Strategic Sourcing, Distribution, Supplier Outreach   5) Supplier Outreach
              • Distribute RFQ packages (profiles)
              • Contact suppliers in local languages using local resources
              • Manage supplier questions
              • Track suppliers interest in project
              • Collect quotes and cost breakdowns
              Supply Chain, Strategic Sourcing, Cost Analysis, Award   6) Analysis & Award
              • Analyze the resulting bids and cost breakdowns from suppliers
              • Review award possibilities with buying team
              • Solicit clarification from suppliers
              • Communicate award decisions
              • Optional: conduct any required on-site supplier visits

              Gibson Consulting professionals will work closely with manufacturers to ensure there are no surprises throughout the entire supply chain; from supplier identification and qualification to delivery confirmation. With Gibson Consulting, you will know the best international sourcing strategy to deploy and you will know you are getting the best deal.

              World Wide Hourly Production Wages
              Labor Cost Advantage

              Supply Chain, Strategic Sourcing,  Global, Production, Labor, Wages

              Average Savings by Commodity When Sourcing With L.C.C.S.

              Supply Chain, Strategic Sourcing, Labor, Savings, Commodity, Low Cost

              • Calculations include categories with over $100,000 in value
              • Calculations include categories with complete existing cost data
              • All categories include quotations from at least one L.C.C.S. supplier
              • Additional costs outside of suppliers’ unit prices (less freight) were factored in savings %
              • Only includes projects supported by consulting sourcing teams

              Low Cost Country Sourcing migration takes more time and resources initially to set up correctly. Cross- functional coordination is important and time consuming for categories such as:

              • Drawings
              • Data Accuracy
              • Translation & Communications
              • Supplier Pre-Qualification
              • Supplier Profiles
              • Negotiations
              • Buy-In for Supplier Selection
              • Transition Issues to New Suppliers

              If we don’t get the process right the first time, it requires three times the effort to address and render later on. The single largest long-term sourcing savings opportunity is through L.C.C.S., including non-sensitive supplier categories (80%/20% Rule). Since this is true, it is essential that we invest our efforts now so it will payoff for years to come. The timeframe set for implementation is long because "speed is of the essence." Our clients deserve more than suppliers with good pricing- we take the time to seek out those with the best quality and service as well. Lowest "priced" suppliers are rarely chosen, less than 10% of the time. Selection through Low Cost Country Sourcing must strike a strong balance between operations, cost, support services, and unique capabilities. Low Cost Country Sourcing provides the greatest opportunity for savings and so must be executed and implemented with nothing less than diligent excellence.

              Timeline Differences Between Domestic and Low Cost Country Sourcing

              Supply Chain, Strategic Sourcing, Globalization, Timeline, Domestic, Low Cost Country

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