Oversea outsourcing - making it work

The attractions of a supply source that could reduce unit costs by 80% are obvious. Not so obvious are the implications for the agility of the supply chain and the ability to maintain customer service performance. In considering transferring manufacturing to low cost regions, most assessments look at cost benefits and business transferability, but tend to overlook the issues created by an extended supply network. The characteristics of a network incorporating low cost supply sources can drive dramatic and unforeseen effects on business performance. Detailed, objective planning is essential if the unit cost savings are to translate into increased margins.