Are You Prepared To Manage Sourcing From China Or India?

A study released last week from A. T. Kearney, Chicago, revealed that only 53% of the 275 international companies surveyed had strategies to deal with supply chain and logistics costs when sourcing from low-cost supply markets. Just 39% have formal plans to increase their supplier base from global sources.

"Companies are chasing savings through overseas sourcing, but their internal structures are likely to prevent the full benefits of these savings from occurring," says John Blascovich, an A.T. Kearney vice president and leader of the study." Waiting too long to develop the right strategy or skill set could mean losing access to scarce, capable resources and the competitive edge they provide."

There is no time to lose as the study entitled "Assessment of Excellence in Procurement" concludes that by 2009, 72% of companies will source from China. Eastern European sourcing will reach 59% while 50% of the companies plan to source from India. The study finds that North American companies expect to decrease their sourcing from the U.S., Canada, Mexico and Japan in the next five years while sourcing from Western Europe will remain constant.

A. T. Kearney