Establishing a low-cost country sourcing (LCCS) program is a matter of survival for companies, according to the latest report from market research firm Aberdeen Group, but many challenges remain in establishing this strategy.(RESEARCH UPDATE)(Brief Article)

Purchasing, August, 2005

Establishing a low-cost country sourcing (LCCS) program is a matter of survival for companies, according to the latest report from market research firm Aberdeen Group, but many challenges remain in establishing this strategy. Many manufacturers like General Motors and Toyota are pushing suppliers to match pricing from low-cost nations like China and India, Aberdeen says, while its research reveals that total costs of goods purchased from tow-cost countries are typically 10-35% lower than costs in the U.S.

or Western Europe. On average, companies source 21% of their total spend from suppliers in low-cost countries, but in three years, that will increase to 39%.