Publish Date
Dec 18, 2020
Best Cost Country Sourcing
Service / Industry: Supply Chain & Procurement Services
Geopolitics, tariffs and trade fluctuations, shifting costs and capacity, and a global pandemic that disrupted business globally – if the last few months have taught us anything, it’s the power of resiliency.
Organizations learned the hard way that single sourcing from the lowest cost provider introduces significant risk, especially in instances where that strategy is used without backup plans to allow for exchange of either suppliers or geographies. This, combined with promising new entries on the global stage, means many companies are reevaluating how to balance cost competitiveness and risk when sourcing raw materials, manufactured goods and services.
What are Best Cost Countries?
Best cost countries are often erroneously equated with low cost countries, but while the latter may offer the lower price, underlying factors associated with doing business in and with these countries can collectively produce an unfavorable total cost to the company.
Evaluating low cost countries based on labor, materials, logistics, inventory, payment terms, trade considerations and others, helps companies determine the location or locations where their total cost of ownership is optimized – their best cost countries.
Change is the constant. Learn more about how A&M applies leading practices and the latest global manufacturing and sourcing data to help clients manage change, and identify new options that address total cost and supply chain risk. Contact us today.
Authors
Christopher Kulp
Christopher Kulp is a Managing Director with Alvarez & Marsal Private Equity Services Operations Group in New York. He leads the Procurement and Sourcing group. With more than 26 years of consulting and industry experience, Mr. Kulp brings significant expertise in delivering EBIT improvement through sourcing, procurement and broader supply chain transformation. Mr. Kulp’s experience includes direct and indirect sourcing, category management, procurement optimization, make/buy strategies, working capital improvement, aftermarket/warranty optimization and broader operational improvement.
How Jit Lim
How Jit Lim is a Managing Director with Alvarez & Marsal Asia in Shanghai. He brings 18 years of operator and consulting experience in leading corporate transformation. He focuses on delivering bottom-line results in supply chain management, lean manufacturing process areas and revenue enhancement. Mr. Lim has P&L experience leading Asia Pacific and China for multinational corporations including private equity held portfolio, to deliver turnarounds, business transformation and revenue growth.
Russell Hunt
Russell Hunt is a Senior Director with Alvarez & Marsal’s Private Equity Performance Improvement practice in Houston. He has more than 20 years of experience with private equity clients in the pre- and post- acquisition areas. His focus areas include operations, supply chain, procurement, engineering, and manufacturing. Throughout his career, Mr. Hunt has been responsible for assessing and implementing solutions for some of the world’s largest private equity portfolio companies.
Thorsten Schaefer
Thorsten Schäfer is a Senior Director with Alvarez & Marsal’s Corporate Transformation Services in Düsseldorf. He brings 15 years of experience in procurement and supply chain. His primary areas of concentration are leading strategic global procurement projects, realizing savings in procurement and resolving supply chain issues. Mr. Schäfer has worked with clients across a range of industries including manufacturing and industrial goods, automotive, steel, oil and gas, aerospace, marine navigation and automation solutions, material and product testing services, semiconductors and ship management.