Low-Cost Country Sourcing: Trends and Implications

Low-cost country sourcing has for long been one of the hottest buzz words in the purchasing and supply management community, especially among practitioners. The lack of coverage in the academic field can potentially be explained by the complexity and the breadth of the topic. Although companies in most industries have sourced on a global level for decades or even centuries in order to reduce cost, the subject have received increasing attention over the last few years in a sense that the concept has become more and more institutionalized as part of the overall sourcing strategy. The developments are welcome – especially since the field of purchasing and supply management traditionally has been lagging behind other, more “acknowledged” disciplines such as finance, accounting, and marketing, among others. This lag is glaring if one considers the absence of faculties involved in the discipline among many universities. Therefore, the initiative of Supply Management Institute to build a worldwide research and training network has proven to be highly attractive for both scholars and practitioners. Furthermore, the discipline has also become increasingly complex due to globalization effects, where business networks become increasingly intertwined and the flow of goods, services, money and human capital grow exponentially over time. To handle the situation, companies are in desperate need for knowledge and information that can help them to crafting effective strategies that can secure supply, reduce risk and ultimately translate into competitive advantage.