Adapting to globalization and finding opportunity in modern Asia.

The Asia Pacific region is currently considered the epicenter of global sourcing. In fact, Asia's success as a source of supply has also made it one of the world's fastest growing consumer regions. However, its preeminence as a "low cost region" could diminish as urban sprawl and better wages are introduced.

International procurement organizations.

High performance through global sourcing is consistent with a marked shift in behavior from "product-specific sourcing" to commodity and supply market specific "strategic sourcing." Companies are demanding more visibility, information, interaction, communication and direct relationship development with emerging supply and markets.

More and more companies are challenging the typical trading agent model, primarily because it filters out critical market information needed to formulate supply market strategies and make key decisions. The trading agent model is being replaced with "on the ground" Asia sourcing expertise in the form of global supply chain managers, which typically do a better job of reducing costs and increasing buyers' market knowledge.

The role of logistics organizations.

Third or fourth party logistics (3PL or 4PL) is the most comprehensive and far reaching way to incorporate new sources of supply into an established supply chain. Some companies, generally smaller companies, seeking to avoid operational complexity and large investments opt instead for trading agents, which help identify local suppliers, negotiate prices and follow up on order fulfillment and logistics. But trading agents also add costs by tacking on commissions. They can also become a barrier between the project and supply markets.

Logistics offers more benefits and generally avoids the limitations associated with trading agents. In effect, the 3/4PL's are extensions of a company; staffed with specialized professionals that perform dedicated order and logistics management functions. This approach often represents the best chance to reduce costs and limit lead times. 3/4PL's also put local capabilities "on the ground," thus giving greater proximity to supply markets and better responsiveness to local opportunities.

Asia's manufacturing evolution.

Today's low cost sources of materials and equipment could soon become mid-cost sources. This metamorphosis is already starting to happen in China; which is why smart client's, in addition to their diligent application of leading project management practices are exceptionally agile and flexible. They expect change and are ready for it. For them, innovative supply chain management and flexible responses are the tenets to achieving value and high performance.