Low Cost Country Sourcing: Look beyond China and India
June 4, 2007 by SwizStick
Filed under Supply Chain Management
Ask anyone where companies look for low-cost sourcing overseas and the answer invariably would be China, probably followed by India. While they would be correct, this article from Logistics Management shows that companies should be looking beyond the easy answers of China and India and look at the opportunities of the emerging markets of CEE (Central and Eastern Europe).
Why Central and Eastern Europe? One good reason is that most CEE countries are now part of the European Union. Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia joined in 2004. Bulgaria and Rumania were admitted in early 2007 and admittance of Turkey is pending. For companies outside the region, EU accession means new market and offshoring opportunities—as well as more freedom to conduct barrier-free business.
Central and Eastern European companies are also working hard to update their facilities, seeking to match Western levels of unit cost, quality and product availability, and thus make their businesses more sustainable and attractive to Western buyers. Even with these upgrades, CEE wages remain far lower than in Western Europe, and it could be 20 years before the gap closes completely.
Read the whole thing.
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