In this quarter’s feature article this quarter, Ariba’s Arun Kharbunda and Vincent Lo offer insight into low-cost country sourcing and how to determine if sourcing direct materials from India is right for your business. The article discusses MNC’s sourcing and procurement activities in India today, as well as the business environment that sustains this interest—with an eye toward comparisons with China. Arun and Vincent explore how companies like yours can mitigate those risks unique to sourcing from India.

In this quarter’s feature article, Alexander Hahn and Patrick Furey of Ariba highlight how complex logistics requirements and supply chain risks often complicate offshoring, and how nearshoring is now re-emerging as a critical focus area within low-cost country sourcing. Despite inflationary pressure in many of the raw materials markets that we track at Ariba, there was actually some encouraging news for buyers this quarter. For example, metals sourcing activity reached two-year highs, and savings levels in categories such as machined castings exceeded historic averages. To get a sense for which categories might provide the best opportunities for sourcing savings next quarter, review the Hot/Cold matrix at the end of each category section in this quarter’s SupplyWatch.

This past quarter unfortunately brought natural disasters in the form of Hurricanes Katrina and Rita, which were not only devastating to thousands of people in the US Gulf Region but have also caused volatility in a wide variety of markets. In the feature article this quarter entitled "The Impact of the Hurricanes on Commodity Markets", Ariba category managers Mike Petro and Patrick Furey explore the storms’ impact on the metals and plastics & rubber markets.