Low Cost Country Sourcing Risks

By http://www.dragonsourcing.com/

What is Low Cost Country Sourcing ?

In low cost country sourcing,goods and services

are procured at a much cheaper price.

This strategy reduces the operational cost.

It generally comprises two parties :supplier and

consumer.

The main aim of this sourcing is to obtain good

quality low cost products.

Risks in Low Cost Country Sourcing

The main aim of low cost country sourcing is to procure

good quality low cost products and services. China and

India are the best low cost country. The organization

mainly followed this strategy due to low labor cost, low

production cost, low material cost and to enter in

emerging markets. But certain risks are involved.

Supplier Knowledge .

Quality

Infrastructure.

Supplier Knowledge

Supplier knowledge varies from country to country.

Therefore before selecting a supplier, their

knowledge must be checked.

It will be great if you visit the supplier and conduct on

site visits and assessments.

Therefore make sure that the supplier has the

descent knowledge to meet the product requirements.

Quality

The main problem with the quality is that quality is

proportional to cost.

Organizations must make sure that they are getting the

desired quality.

Quality that is maintained in the sample, must also be

maintained during the delivery.

Therefore quality must highly be verified.

Infrastructure

Infrastructure is an important factor.

Infrastructure is the basic requirement, to

meet the deadline.

Latest technology must be used in order to

be competitive.

Most of the low cost countries lack it.