Low-cost country sourcing (LCCS) is a procurement strategy, where a company sources products from countries where the cost of materials and labor is lower, in order to reduce operating costs and increase gross margins. The strategy also enables companies to diversify their supply base and derisk the supply chain, while also benefitting from possible improvements in quality of efficiency.
Organizations across industries have recognized the benefit of sourcing materials, products, and parts from lower-cost countries and regions. With procurement now at the forefront of organizational corporate strategy, LCCS has gained priority, as it is a proven procurement strategy for cost reduction.The key is to ensure that the cost reduction does not lead to quality or supply issues, which might then create costs that negate the procurement savings.
Enventure’s Low-Cost Country Sourcing services enable clients to analyze the purchase parts or materials, to identify ideal candidates for LCCS. For the shortlisted items, the Enventure team identifies suitable vendors from low-cost regions. In doing so, the client’s preferences or legal trade restrictions are also considered to identify target geographies. For example, in Asia, typical geographies we focus on would be China, India, Indonesia, or Vietnam. For the Americas, it maybe Brazil. Mexico or Bolivia. Enventure has a very good understanding of the global supply base from multiple geographies, so the process of identifying vendors is very efficient. The Enventure sourcing team also takes care of vendor prequalification, floats RFIs / RFQs, and obtains quotations on behalf of the client. Based on all the information received, Enventure provides the Client a consolidated report with recommendations, and pros and cons of the various identified supply options, also considering key supply chain factors like lead times, MOQ, logistics costs etc.
Based on the final negotiations and purchase decision by the Client, Enventure can also coordinate and facilitate the actual purchase process, all the way through to delivery of material to the site. The fact that we have industry experts with deep understanding of all industrial commodities ensures that the results are comprehensive and professional.
Beyond conducting LCCS as a tactical initiative, we also develop sustainable LCCS programs for clients, where our Consultants design and implement an ongoing methodology to integrate LCCS to the Client’s sourcing program, and providing hands-on support by creating an Enventure virtual team offshore, to manage the LCCS program for the client.