Procurement Professional is the official publication of CIPS Australasia

Where next for global sourcing?

12 Mar 2010

Source: ProcurementLeaders.com, 4th March, 2010

India and China's reputations as the heavyweights of the sourcing world is well-established and well-known to pretty much everyone. But as low-cost-country sourcing goes, this hegemony has its rivals in the making. What remains to be seen is which country, or even which continent will be able to compete as more and more companies continue to look global.??

Some of the world's largest retail chains, most notably Walmart, are establishing global sourcing centres and effectively cutting out the middleman to get direct access to their market. While they're most certainly not leaving behind the more familiar bases - Walmart recently signed strategic sourcing agreement with Li & Fung in China - this move does put them directly in touch with suppliers in African and South American markets.??

The signs are there that this is the cusp of a new generation of sourcing destinations.??China and India are both destinations with strengths and weaknesses in their own rights, but cheap, well-educated labour has seen them dominate as sourcing targets for manufactured goods.??Still, these attributes are increasingly not limited to these powerhouses.

Businesses will be aware that South American and African countries offer access to extremely lost-cost labor, assets and materials. Particularly those with strong FDI and an established internal economy have made themselves popular candidates.

Click here to read more.