Low Cost Country Sourcing Risks

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 knowledge must be checked.

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 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.