Ariba Low-Cost Country Sourcing (LCCS)

Globalization and the Internet are having a significant impact on spend management and compliance. In particular, sourcing organizations are now under continual pressure to penetrate new geographic markets while reducing inventory carrying costs. Low-Cost Country Sourcing (LCCS) is a corporate initiative driven by these ongoing pressures. It refers to the practice of sourcing of products from low-cost country suppliers for less than what they would pay their local suppliers.

Companies interested in LCCS may face a number of implementation challenges, including:

  • Inability to determine the right LCCS strategy, calculate the total cost of ownership, and qualify foreign sources of supply.
  • Lack of consistent processes for evaluating foreign suppliers, and difficulty in developing and training new suppliers in low-cost regions.
  • Inability to coordinate and collaborate on aggregate spend across regions, divisions and sites.
  • No infrastructure to automate the sourcing negotiation process.

Ariba LCCS Services begin with an Opportunity Assessment in which our experts analyze client spend, identify high potential categories for LCCS (TCO consideration), and prioritize a list of suitable categories to source. During Sourcing Execution, we leverage our worldwide presence and regional/cultural expertise to optimize a global sourcing event for direct materials. Ariba includes a comprehensive sourcing effort (RFI, RFP, Qualification Round) and develops a recommended list of suppliers and first-round pricing.

Supplier Implementation includes final price and contract negotiation, supplier assessments, first article shipments, implemented supplier(s), and shipped first articles for testing. Ariba has the capabilities to act as client's international purchasing office. With Ongoing Supplier Management, Ariba manages supplier relationships, contracts, and specification-to-product variances. We also will obtain LCCS data for other spend categories and monitor current market conditions.

Ariba LCCS helps organizations consistently achieve results through these core enablers:

  • Speed. Ariba enables companies to rapidly identify opportunities for LCCS savings and accelerate completion of LCCS sourcing projects.
  • Coverage. Leveraging our globally deployed specialists and cross-category, cross-industry supply market knowledge, companies gain unique sourcing depth across a wide spectrum of LCCS initiatives.
  • Sustainability. Companies can capture LCCS best practices and project templates by implementing LCCS using their own software. Ariba helps them design a targeted LCCS program to build their capabilities and drive adoption.
  • Flexibility. Companies can engage dedicated, on-site teams or shared-service resources on an as-needed basis. And they can scale and adjust service levels as their needs evolve.