Low Cost Country Sourcing (LCCS) is a procurement strategy in which any company or brand can source various required materials from other countries with a lower production and labor cost. It ensures ease in cutting down on operating expenses.
High competition, globalization and unpredictable costs of raw materials have caused a significant growth of low cost country sourcing. The countries that are considered best in the world for low-cost sourcing openings are Vietnam, Thailand and India. Here the labor rate is incredibly low when compared to countries like the USA, Europe and even China.
At Shama Consulting Plus, the sourcing is mainly done from India and Vietnam, which brings savings of about 20-25% of your total spending. With political stability, flourishing economy, educated population and more, these two countries are right now hubs for the best low cost procurement.
It would help if you chose LCCS for savings on various commodities like castings, rubber, MRO, sheet metal, fasteners, and more. An expert team that performs detailed market research to prepare a report on the drawings/RFQ package. This helps to come out with an innovative strategy to approach Low Cost Country Sourcing.
The steps needed to acquire a suitable low-cost goal:
- Supplier Identification
- NDA Signing
- RFQ Template Designing
- Zero-based Costing
- Acquiring Quotations from suppliers
- Quote Comparisons
- Final Recommendation of L1, L2, and L3 suppliers
Tips used for better sourcing:
- Understanding the tariff and tax structures
- Perform transportation cost analysis
- Consider EOQ delta
- Determine quality control for business outcome
- Research political instability and other area based problems
- Monitor the suppliers.
These steps and tips are designed to fulfill the purpose of attaining the right set of target costs and savings. We also use solid databases and refer to auto-trade shows guides, internet research, and other skilled and native resources for the same purpose.
Moreover, the Government policies in India and Vietnam are pretty favorable to do business, proving to be an added perk for LCCS. The suppliers in both countries are proactive and have a systematic approach towards understanding your sourcing needs. They offer you the best prices and help you prevent unnecessary spending. LCCS adds up value and opens new geographies for you.
Shama Consulting Plus are the best Low Cost Country Sourcing experts and management consulting in India, providing clients from across the world a better route towards sourcing for their business.