Business Challenge: Issues with identifying low cost sourcing destination
A leading manufacturing firm with operations across multiple countries wanted to assess the possibilities of sourcing a set of raw materials finished products from low/best cost sourcing destinations.
Situation: The client was lacking understanding of the key selection parameters
The client was interested in exploring the possibilities of procuring key raw materials and finished products from low/best cost sourcing destinations. However, they were concerned about the quality and operational difficulties, as they had a set supplier base and had not tried exploring alternative options.
Approach: Applied a systematic approach for identification and shortlisting of best alternate sourcing destinations
We took a systematic approach to identify, assess and recommend on the best alternative sourcing destinations based on client’s procurement pattern and spend levels. We initially conducted a benefits assessment to quantify the possible savings opportunities, followed by identification of potential sourcing destinations and shortlisting them based on the exact procurement needs of the client. We also identified potential risks with sourcing from the shortlisted destinations, and developed recommendations on mitigation strategies.
Impact: Client gained detailed understanding of possible low/best cost sourcing destinations and associated benefits and risks
The client explored the possibilities of procuring from alternative destinations and the potential benefits. They were also able to develop understanding of the potential risks associated with sourcing from the identified destinations and mitigation strategies for making effective go/no-go decision.