Companies are quick to capture savings by sourcing from low-cost countries, but they can come to regret the move if they fail to understand the risks of working with unknown and difficult-to-manage suppliers.
A serious component shortage five years ago led Hewlett-Packard to develop Procurement Risk Management, a combination of new processes and technology designed to help HP manage supply chain risk. This project was named 2005 winner of the Supply Chain Innovation Award.
A conversation with Yossi Sheffi, professor of engineering systems at the Massachusetts Institute for Technology and director of the MIT Center for Transportation and Logistics.
Low-cost labor is driving the stampede of manufacturers to China, but they must also consider the logistics implications of a longer supply chain and under-developed local infrastructure.