Subscribe to our free, weekly email newsletter!


Leveraging Trade Agreements to Achieve the Next Level of Savings from Global Sourcing


February 07, 2012

Manufacturers can spend 50% or more of revenue on purchasing parts. So, it is not surprising that sourcing from low cost countries to improve competitiveness has been such an important business strategy in the past ten years. According to AberdeenGroup 60 percent of manufacturers have turned to China as the cornerstone of their low-cost sourcing strategies and in the past few years this level of spend has almost doubled — from 21 percent to 39 percent. The ability to outsource product and skilled trade labor, at a fraction of the cost is integral in maintaining a competitive advantage in market pricing.

To achieve the next level of savings from a low-cost country sourcing strategy, leading companies are using trade agreements to reduce landed costs through duty reduction.

Free trade agreements are a pact or program between a designated group of countries that have agreed to eliminate tariffs, quotas and preferences on most (if not all) goods and services traded between them. Free trade agreements are designed to promote trade between regions, increase labor and sourcing opportunities within those regions, and open up foreign markets to exporters. Free trade agreements (FTAs) pose an incredible opportunity for global companies to reduce landed cost of sourced product, and improve profit margins on exported product from anywhere between 3-7% on average.


Download this paper:
Leveraging Trade Agreements to Achieve the Next Level of Savings from Global Sourcing
Sponsored by:
image
* Indicates a required field
*Email:
*First Name:
*Last Name:
*Title:
*Company:
*Country:
*Address 1:
Address 2:
*City:
*State:
Province/Region:
*Zip/Postal Code:
*Phone Number:
Save my data on this computer (do not use on public/shared computers)

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Even though some of its key metrics dropped sequentially from August to September, the outlook for manufacturing over all remains strong, according to the most recent edition of the Manufacturing Report on Business issued today by the Institute for Supply Management (ISM).

Company officials said that these planned changes, which will take effect on January 4, 2015, will provide for increases in current pay rates and reduce the time it takes for its nearly 15,000 drivers to reach top pay scale.

While the economy has seen more than its fair share of ups and downs in recent years, 2014 is different in that it could be the best year from an economic output perspective in the last several years. That outlook was offered up by Rosalyn Wilson, senior business analyst at Parsons, and author of the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics Report at last week’s CSCMP Annual Conference in San Antonio.

Matching last week, the average price per gallon of diesel gasoline dropped 2.3 cents, bringing the average price per gallon to $3.755 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).

A number of key topics impacting the freight transportation and logistics marketplace were front and center at a panel at the Council of Supply Chain Management Annual Conference in San Antonio last week.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA