What is Low-cost country sourcing and its benefits?
Low-cost country sourcing (LCCS) is nothing but a strategy of procurement, where a company sources materials from countries. They are sourced with lower labor and production costs to help cut operating expenses. LCCS comes under a broad category of procurement efforts called global sourcing.
There are many ways of monitoring inventory, supply chain statistics, and resources that enhance the possibilities of taking the critical decisions, rapidly. The incorporation of real-time information and analytics have also equipped sourcing managers to ease advanced risk management.
Primary Benefits of Low-Cost Country Sourcing:
1) Cheaper labor:
It is usually quite expensive to hire labor in western countries when compared to those in an emerging market. A number of low-cost country sourcing nations in Southeast Asia, the middle east and Europe, provide unskilled and skilled labor at desirable rates.
2) Abundance or inexpensive raw materials:
Sourcing and Procurement in foreign markets are profitable too because of the wealth of raw materials, which can be obtained at far better rates than in native western countries. Therefore, the costs of production as well tend to be quite lower in such marketplaces.
3) Less energy and infrastructure spending:
The factors that are needed to be considered are the costs of energy and maintaining manufacturing infrastructure. Through sourcing needs to lucrative foreign marketplaces, businesses don’t have to pay premium tariffs.
Besides these, there are many other advantages, which western businesses can experience with usage of emerging market sourcing strategies. Only get in touch with a reputed sourcing and consultancy firm and their experts can help you out. Many businesses are already reaping the advantages of inexpensive sourcing ventures.