Strength in clusters

Many sourcing managers face a new problem. Intensified global competition and the initial success of many international sourcing initiatives has created demand from the board to increase sourcing from low-cost countries such as China, India or Vietnam. As a result, some companies have realized they need to develop their newly focused global sourcing activities in the same way as they have entered new customer markets: cautiously and step by step. Sourcing from clusters offers this approach. Clusters are a much safer bet on the future competitiveness of a specific sourcing region than any single supplier or other regional unit for long-term investment. In addition, the build-up of a strong sourcing office even enables companies to capture most of the benefits that a cluster offers to embedded companies.