Global Procurement Australia Discussion 2022

Running head: GLOBAL PROCUREMENT
GLOBAL PROCUREMENT
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GLOBAL PROCUREMENT1
Abstract
There are chief principle related to LCCS depending on the procurement of sourcing
proficiencies, by distinguishing and using cost arbitrage amongst geographical boundaries.
Procurement strategy aids organization to use foreign business enterprises with reduces wages in
order to produce resources for manufacturing process. LCCS is explained as an extensive
category of procurement efforts known as global sourcing. LCCS mainly involves two parties.
Procurement strategy benefits organization to exploit overseas business initiatives with decreases
incomes in order to produce properties for manufacturing procedure. However, with related
establishments, which are serviceable on leaner funds in contrast to local operations,
corporations possibly will gather capability to reduce operational budgets. The paper has offered
inclusive insights related to role and significance of LCCS and provide relevant illustration of
organization who has applied any form of sourcing in recent times.

GLOBAL PROCUREMENT2
Table of Contents
Introduction......................................................................................................................................3
Part 1................................................................................................................................................4
Methodology....................................................................................................................................4
Literature Review............................................................................................................................5
Exploration of sourcing in procurement......................................................................................5
Understanding Context, drivers and challenges of LCC sourcing..............................................6
Suitability of products and services sourcing..............................................................................9
Part 2..............................................................................................................................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

GLOBAL PROCUREMENT3
Introduction
Low Cost Country Sourcing (LCCS) is recognized as a form of procurement or sourcing
method in which organizations typically source supplies from nations with lesser labour and
manufacture expenses in order to reduce operational outlays. However, LCCS is explained as a
broad category of procurement efforts known as global sourcing. According to Lorentz et al.
(2015), process of LCCS mainly involves two parties. Consumer and supplier nations like the
United Kingdom, U.S, West European nations, Australia and Canada are viewed as HCC that is
High-cost countries, while resource opulent and controlled income labour locations namely
China, Indonesia, India, Brazil, East European countries and Mexico are recognized as LCC.
Min, Park and Ahn (2017) have noted in LCCS products distributions from LCC to HCC,
although skills and expertise typically runs from HCC to LCC. There has been recognized major
principle related to LCCS, which rely on the acquisition of sourcing efficiencies, by recognizing
and exploiting cost arbitrage between geographical borders. Procurement strategy helps
organization to use foreign business enterprises with reduces wages in order to generate
resources for manufacturing process. However, by finding relevant organizations, which are
functional on leaner budgets in comparison to domestic operations, companies, may gather
competence to lessen operational costs (Lorentz et al. 2015). Thus, LCCS is recognized as vital
part of company’s global sourcing strategy. The following paper will contain comprehensive
review of literature of role and significance of LCCS and provide relevant illustration of
organization who has applied any form of sourcing in recent times.