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              Home | Global Practice Lines | Low-Cost Country Sourcing

              Low-Cost Country Sourcing
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              Supply Chain, Strategic Sourcing, Results, Categories
               
              Supply Chain, Strategic Sourcing, Leadership, Skills

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

              LCCS Project Managers (Outside Consulting Assistance) are needed to accelerate the process

              • Dedicated Project Managers based in US, Europe, and China
              • Experience working directly for variety of other US or European OEMs
              • All have backgrounds in Executive Management, Operations, Finance, Engineering, MBA’s, Accounting, Logistics, etc.
              • All with Purchasing and Supply Management backgrounds

              Supply Chain, Strategic Sourcing, Globalization, Low Cost Country, Suppliers

              • 30% of spend for manufacturers (North America) western economy companies is sourced LCCS
              • Range of savings is 25-60%

              Core Competencies of LCCS Sourcing Team: Consulting Team

              • World Class sourcing implementation process resources
              • Buyer training on technology tools
              • Supplier identification (experience/database resources)
              • Supplier training
              • RFQ development & support
              • Supplier follow-up (during bidding and post-bidding)
              • On-site supplier inspections/audits
              • Coordination of buyer visits to suppliers
              • Consulting/advisory services for their region
              • Implementation & transition services
              • Translation services

              Levels of LCCS Advantage

              Supply Chain, Strategic Sourcing, Low Cost, Globalization, Advantage

              Supply Chain, Strategic Sourcing, Process, Methodology

              LCCS Potential Immediate Results

              • Any 4 categories selected enough to keep 2 full cross-functional teams fully busy
              • All category options “worth” doing (i.e. speed, resources, and savings)
              • Annualized savings = X multiples of cost to implement
              • All could be fully accomplished in 2008 and transitioned and implemented
              • Full Run Rate Payback- full year savings in 2009

              Negotiable Issues

              1. On-time delivery 33. Joint advertising
              2. Inventory management34. Field support
              3. Lead times35. Penalty clauses
              4. Pricing for new products36. Inbound Routing
              5. Market basket pricing37. Computer hardware and software
              6. Joint marketing38. Volume rebates
              7. Quality specification requirements39. Transportation
              8. Technical support40. Scheduling / vendor capacity
              9. Training41. Warranties
              10. Payment terms42. Substitutes
              11. Ordering options43. Force Majeure
              12. Freight44. Parts program
              13. IT systems linkage45. Installation
              14. Volume requirements46. Title / ownership transfer
              15. Claims resolution47. Cost reduction programs
              16. Maintenance of competitive advantage48. Allocation during shortages
              17. Nonperformance remedies49. Index pricing / Hedging
              18. Packaging50. Emergency orders
              19. Continuous supply commitment51. Billing procedures
              20. Buyback / return program52. Alliance meetings
              21. New product beta testing rights53. Inspection
              22. Elimination or reduction of surcharges54. Union strike contingencies
              23. Price protection period55. Length of agreement
              24. Exchange rates, customs and duty56. Loading times and schedules
              25. Conflicts of interest57. Paperwork reduction
              26. Supplier performance measures58. Purchase order terms
              27. Transition plans59. Contract cancellation
              28. Joint investments60. Licenses and permits
              29. Capital equipment61. Escalation costs
              30. Tooling62. Value engineering
              31. Demurrage63. Inventory Management
              32. Letters of credit

              LCCS Examples

              Supply Chain, Strategic Sourcing, Globalization, International

              Gibson Consulting has over 10 years experience in Low Cost Country Sourcing. Our experience includes:

              • Eastern Europe
                • Fabrications
                • Machining Equipment
              • Taiwan
                • PCB/Semi-conductor
                • Assembly
              • Japan
                • Fabrications
                • PCB
              • India
                • Vitreous China
                • Metals and Machining
              • China
                • Metals and Machining
                • Plastics
                • Components
                • Automotive
                • Electrical

              Gibson Consulting can support LCCS teams to reduce risks and improve results

              Supply Chain, Strategic Sourcing, Low Cost Country, Risk Reduction



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