A change is afoot in low-cost sourcing dynamics

Emerging markets are no longer type-cast as low-cost sourcing

 

KevinOMarah.jpgSCM World’s chief content officer, Kevin O’Marah, recently released his ‘Top 10 Supply Chain Facts of 2014’.

Noteworthy was O’Marah’s fact number five: low cost countries are no longer mere sourcing prospects – they are increasingly sought-after trading partners.

O’Marah’s Top 10 is based on the fourth annual ‘Chief Supply Chain Officer Report’, for which data was collected by SCM World from 1 068 respondents.

Of the respondents, fewer than 17% view emerging markets primarily as low-cost sourcing opportunities, 34% are looking to emerging markets mainly for new sales growth, and 48% equally seek sourcing and sales in emerging markets.

“It seems fair to say that the era of ‘low-cost country’ sourcing is close to over. Globalisation from here on out is very much a two-way street,” O’Marah contends in his Top 10.

But what does this change in low-cost sourcing dynamics have in store for African supply chains, especially those with ties to low-cost China?

While costs remain a focal point for organisations seeking to increase their margins, China’s competitive position as a low-cost sourcing destination is changing. New competitive forces are shaping China and other low-cost countries’ competitiveness.

JavierCunat.jpgJavier Cunat, Associate Director of The Beijing Axis, spoke to SmartProcurement Review about the implications of China’s transformation for global supply chains.

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