Welcome back to another installment of Whitepaper Wednesday here on the Purchasing Certification Blog. This week, I’ll be reviewing a whitepaper entitled “Competitive Alternatives: KPMG’s Guide to International Business Location, 2010 Edition” from KPMG.
I originally thought that this whitepaper may be helpful in locating different countries from which to source. While there are indeed many statistics in the whitepaper that are quite applicable to sourcing opportunities, I think that it is only fair to point out that the whitepaper is primarily intended to help businesses identify in which countries it might be desirable to open a new facility.
The whitepaper compares 26 cost components of doing business in 10 countries and ranks these countries in order of overall cost competitiveness, with the US being a baseline against which others are compared. So, which country was the most cost competitive?
Mexico was. The whitepaper said that “Mexico’s major cities have a business cost advantage of 18.2 percent, on average, relative to the US baseline.”
Who were the highest cost countries? There were only two that were higher cost than the US: Germany, with a 2.6% cost disadvantage, and Japan, with a 7.6% cost disadvantage.
The disappointment in this whitepaper was that it was limited to 10 countries. Unfortunately, key sourcing hotspots like China, India, and the Philippines were not included, neither were emerging sourcing markets like Vietnam, Pakistan, and Eastern Europe.
So, if you’re looking for a how-to guide for determining the best countries in the world to source goods and services, this whitepaper isn’t it. You’d be more likely to get the information and skills you need by taking the online class “Executing A Global Sourcing Strategy.”
That being said, I think that this whitepaper is a decent reading for any procurement professional who is responsible for international procurement and interested in staying abreast of global macroeconomic trends. You can download your own copy of this whitepaper from KPMG’s Competitive Alternatives website.
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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