No More Easy Pickings With Low-Cost Suppliers

BearingPoint. Institute Will your suppliers turn from strategic to catastrophic? No more easy pickings with low-cost suppliers After picking much of the low-hanging fruits, a change of tactics is needed – from the old-school model of low-cost sourcing and cheap, disposable supply network to a supplier-management model that aims for longer-term value 539.3 524.9 The world increasingly depends on low-cost countries for goods ... 433.2 422.4 Eastern Europe and Central Asia 351.3 Compared with advanced economies, the value of 287.6 332.9 exports from Eastern Europe and Central Asia is soaring 233.4 225.3 220.7 210.2 188.9 189.3 194.4 166.6 142.8 113.9 164.6 Advanced economies 100 101.6 147.7 135.2 113.9 95.8 99.2 2000 = Index 100 2002 2004 2006 2008 2010 2012 (annual export of goods) 20 years ago 35% of value for Swedish companies was created by people within the business, now the figure is closer to 20% 35% ... and the share of value add in Western 20% companies has decreased ... Real average wage growth: US, UK and Spain combined (US = 100) 98 94 ,91 ... which drivesup the cost of labour The wage gap between the average wage figures in Asta and in the Western world has decreased as outsourcing has grown in popularity Real average wage growth: China, India and Turkey combined (US = 100) 33.3 2011 2020 2030 Source: ILO Global Wage Database, United Nations Development Programme, Teknikföretagen Business activity survey 4th quarter 2012 BEIO04-ST-IN