Article: Sourcing Equipment From Low-Cost Countries

Recently the Original Equipment Suppliers Association (Kathy Reiss, OESA) wrote an article on “Low-Cost Country Sourcing of Capital Equipment” 

The organization conducted a survey exploring the strategies organizations use to save money on capital equipment acquisitions by purchasing from “low-cost countries” (LCC) such as China, or Korea. The two metrics discussed were the percentage of companies sourcing machinery from LCC and the percentage of their overall spend spent in these countries. The majority of the countries discussed did use LCC- sourcing to manage costs but the vast majority of their spend was not with these countries.

Concerns cited included “…on-going support and maintenance followed by delivery cost, set-up, service agreements, delivery time, import duty, exchange rate, long-term corporate strategies, runoff and warranty.”

“…53 percent indicated that their company utilizes “low or best-cost” countries to source capital equipment. Countries listed were primarily China and included Korea, India and Mexico, with the additional mention of Japan, Germany, Spain and Italy.

For companies using LCC purchasing strategies, 75 percent buy small capital equipment (robots, assembly stations, returnable packaging); 50 percent buy large capital equipment (injection mold machines, stamping presses); 19 percent buy fastener equipment (sonic welding, heat staking machines); and, other equipment purchases …”

Read the full article here…