Global Sourcing and Logistics

Global Sourcing and Logistics
A roadmap for high performance

Contents
The case for transformation 4
Key challenges 6
Guiding principles 8
How to achieve success 9
Excellence in execution 10
Collaboration without complexity 15
Accenture's global network 16
Tools and assets 18
Global gains 21
Procurement contacts 22

According to an Accenture survey 1 , 230 global supply
chain executives plan to double their low-cost
country sourcing activities in the next three years;
they also believe the savings achieved from such
sourcing will increase by a third.
Market globalization is changing the face of multinational
organizations. In their efforts to restructure to comply with local
regulations and take on the challenge of increasing competition
from new Asian brands, companies have turned to low-cost
countries in their search for increased supplier capacity.
As high-cost country supply bases
consolidate, low-cost countries are
increasingly attractive to businesses that
want to boost their bargaining power and
achieve greater savings. There is also a clear
shift to categories of goods with more
technical and engineering components—a
migration from traditional segments, such
as transportation and travel services, food
and consumer products, and retail—to
high-growth, highly attractive markets to
create more value. 2
Our research into the role of supply chain
mastery 3 shows that high-performance
businesses have a deep understanding of
current and future value and effectively
leverage those insights to implement
differentiated operating models and
business architectures. More than ever,
leading companies are using the supply
chain to enhance differentiation, increase
sales, and penetrate new markets and
channels. The approach you take to global
sourcing and logistics can be one way to
achieve that differentiation.
Has your existing operating model been
adapted to meet the challenges of a global
market? Are you satisfying your company's
stakeholders' relentless demands for a
constant wave of innovative products
and services?
Accenture understands what is required to
help companies accelerate their journey to
high performance. High performers push
the envelope. They transform industries.
They outperform their competition, and
themselves. Our groundbreaking research
and deep experience can help you achieve
high performance by attaining—and
profiting from—your global sourcing and
logistics goals.
1 Source: "Where East Meets West: Driving high
performance in low-cost country sourcing"
Accenture, 2005.
2 Source: "Global Sourcing and Logistics for High
Performance: Leading practices and the emerging role
of international procurement organizations in China."
3 Source: "Creating and Sustaining the High-
Performance Business: Research and Insights on
the Role of Supply Chain Mastery," Accenture.
3

As the economic sense of global sourcing and
logistics is now a given, executives want to
know how to best implement this critical
supply chain capability. To be effective, a
company's global sourcing and logistics
policy must be well integrated with its
overall business strategy. Core tenets of that
strategy see total cost of ownership
prioritized over unit prices; risk mitigation
will complement benefits rather than restrict
them; and experience will be leveraged to
address the professional, cultural and
strategic differences in conducting global
sourcing and logistics. Our survey shows that
even companies with considerable experience
in low-cost country sourcing tend to be
overly optimistic in their belief that security
and safety risks are manageable. The reality
is that not all companies have the skilled
resources needed to benefit from global
sourcing and logistics.
Resources
Category Savings (%)
Pipelines 26
Sheet pile walls 24
Pick points 22
Dredge pumps, impellers 18
Additives 17
Gears 16
Specialty chemicals 15
Proppants 15
Piping (eg hydraulics) 11
Commodity chemicals 10
Diesel engines 10
Tinplate/PP packaging 10
Communications & High Tech
PC accessories and storage 34
Passive component 50—RLC 19
Connectors 18
Headset vibration motor 9
Memory 6
Printed circuit board 8
Despite the vast appeal of global sourcing
and logistics, the approaches adopted—and
the results achieved—vary dramatically. At
Accenture, we believe excellence in execution
is the factor that makes the difference. A
company is positioned to make effective
sourcing decisions only when it has a
complete picture of the global sourcing and
logistics opportunity and all that it entails.
Moreover, best returns are realized only when
there is close control over all global sourcing
and logistics processes.
Regardless of your organization's industry,
you can achieve significant returns.
In Accenture's experience, an industrial
company that may be spending 1 billion
euros in direct material can typically find
that 15 to 40 percent of that spend is
suitable for low-cost country sourcing,
equating to around 150-400 million euros.
The case for transformation
These are just some of the typical savings that Accenture has helped
companies achieve by understanding and harnessing the challenges
of global sourcing and logistics.
4
Manufactured goods
Category Savings (%)
Hydraulic cylinders 75
Extruded rubber 50
Extruded aluminium 50
Air filters 50
Machined parts from bar and tube 44
Non-metallic components 43
Industrial cardan 42
Water coolers - radiators 42
Agricultural cardan 41
Special iron casting 41
Iron and steel castings 39
Wire harness 38
Malleable iron casting 37
Medium and small grey iron castings 37
Airco hose assembly 34
Alternators 34
Hose and tube assembly 34
Lights, lamps, bulbs and reflectors 34
Hose assembly 32
Seats (bus) 32
Steering rods 32
Electromechanical clutches 31
Fuel filters 30
The subsequent savings that may be achieved
through a successful low-cost country
sourcing program are also in the region of 10
to 30 percent, or equating to 15-133 million
euros.
Category Savings (%)
Audio/visual devices 30
Welded parts and assemblies 30
Glass 29
Machined parts from castings 29
Sieves (welded parts) 28
Welded parts and assemblies 27
Ball bearings 26
Fuel filters (including water separators) 26
Oil filters 26
Seals and O rings 26
Automotive parts and accessories 25
Gaskets 25
Corrugated packaging 28
Door handling systems 18

Key challenges
With foreign direct investment
climbing year-on-year by 25.4
percent and exports growing at
16.5 percent, China is rapidly
becoming a global economic
powerhouse. Currently ranked as
the fourth largest exporter in the
world, China has quickly become
a benchmark option that no
procurement executive can
afford to ignore.
A key question for senior
executives considering a global
sourcing and logistics strategy is
whether the time and effort
invested in setting up an
international procurement
organization in China will yield
the expected returns. The short
6
answer is yes. More than 70
percent of companies that set up
international procurement
organizations in China believe
that the ventures have met or
exceeded their expectations.
Surveys of procurement
executives also confirm that
executives view highperformance
procurement
organizations in China as a
fundamental part of a global
sourcing and logistics strategy.
Many companies plan to double
their expenditure in low-cost
countries over the next three
years and expect to reap the
benefit of even greater savings. 4
Accenture's broad experience coupled with
the insights we have distilled from
continuous research enable us to
successfully address many of the issues on
the road to profitable global sourcing and
logistics. Those issues include:
Information and certification
integrity
Companies that contact suppliers in
countries such as China with requests for
proposals often receive initial quotations
and quality assurances that are hard to
resist, only to find out further into the
process that those statements are
frequently misleading or incorrect. For
Western companies, integrity is therefore a
serious concern.
English or foreign language
proficiency
Although many suppliers in low-cost
countries have English-speaking sales
people, difficulties can arise when they
need to interact with Western executives to
discuss technical intricacies. Key personnel

at low-cost country suppliers do not always
have sufficient command of English or of
other Western languages to engage in
lengthy or detailed exchanges. Using
translators is one option, but they often do
not have the technical background to
address industry specifics. The risk of
misunderstanding and communication
impasse cannot be underestimated.
Industry standards not
synchronized with international
standards
Sharing drawings with suppliers who may
use different technical standards can result
in delays while the situation is evaluated
and the differences clarified. Once again,
misunderstandings may filter into the
scenario. It may take low-cost country
suppliers an inordinate amount of time to
understand written text explanations of
required industry standards that may be
self-explanatory in the West. Industry
standards that are not synchronized with
international standards—or with your
expectations—can cause costly delays.
Risk management on
delivery continuity
Longer lead times that result when sourcing
from countries such as China and India
require companies to adopt new approaches
to risk assessment and mitigation. Many
Chinese suppliers lack international trade
or export experience, are unfamiliar with
Western terms and conditions that offer
the best pricing, and are not experienced
with export requirements. Few export
under the Delivery Duties Paid (DDP)
formula, preferring Ex-Works instead. 5
Western companies have to pick up the
transportation costs and work with thirdparty
logistics operators to secure the
best terms.
Western companies must also address the
issue of payment terms. Asian suppliers
rarely agree to 60 or 90 day terms with a
new customer or early in a new relationship.
Their initial offer is typically 30-days
prepayment. The negotiation gap is therefore
considerable and can heavily impact
budgeting and revenue.
Underestimating the true
total cost
Business cases may suffer if total cost
models do not have all cost elements
within their scope. Time-to-benefit
statements can often be overly optimistic.
The time and effort necessary to build
relations with suppliers, conduct product
and production testing, integrate suppliers
in the supply chain, and accelerate the
physical material flow can seriously impact
the overall picture. Total cost of ownership
models do not take into account the
potential for quality problems during the
production phase, or the risk of increased
warranty costs.
Lack of a holistic supply
chain view
In recent years, supply chains have
systematically improved in the Western
world. Low-cost country suppliers, on the
other hand, lack experience with the most
modern processes and are often unfamiliar
with the high standards required, such
as sequence deliveries combined with
just-in-time, vendor-managed inventory
solutions or electronic data interchange
communications. These supply chain
aspects are important when determining
which categories can be appropriately
sourced from suppliers based in
low-cost countries.
Limited high-quality research
and development capabilities
While research and development
capabilities at low-cost country suppliers
are improving, they are still below Western
standards. Building a relationship with a
strategic partner who will be fully
integrated within the development process
is a challenge. It can take time to secure
understanding and trust. Collaborative
information technology supporting the
product development process may not be
optimal due to failure to rapidly meet the
demands of innovation.
Internal organizational barriers
When sourcing in low-cost countries, there
is a clear need to ensure that the internal
organization has been adapted to suit new
circumstances. For example, sourcing in
low-cost countries creates a number of
change management issues. Internal buyers
who have spent time and effort fostering
their existing supplier base are often
reluctant to begin the relationship-building
process again, especially since they will
need to accommodate often considerable
differences in cultures and time zones.
Accenture is increasing its
commitment to the Chinese
market, with seven offices, and
50 classes from the Supply Chain
Academy translated into
Mandarin Chinese. Accenture
should be on the shortlist of
consultancies when looking for
business consulting expertise in
Chinese procurement, sourcing of
local suppliers and setting up
offices in China.
AMR Research 2005, ‘Random Notes for November
11, 2005,’ November 2005
4 Source: European Leaders in Procurement by
Steve Wilson and Jamie Bolton, Fall 2005
5 Source: http://www.iccwbo.org/incoterms/
7

Guiding principles
Accenture's approach – During the opportunity assessment phase of
every global sourcing and logistics project, Accenture applies five
principles to drive success.
Principle 1
Rapidly identify potential categories and
low-cost country locations
By capitalizing on Accenture's in-depth
knowledge and proven experience in category
assessment, your organization can kick off
a global sourcing and logistics project with a
tailored set of best low-cost country supplier
options. Furthermore, by applying our lowcost
country prioritization and "should cost"
modeling tool, we can help you identify
the right categories to pilot.
Principle 2
Leverage the category expertise built by
Accenture's global network
Early involvement with Accenture's global
sourcing and logistics network ensures that
fixed resources from each region impacted
are deployed to your project team.
Accenture's category experts and skilled
sourcing professionals worldwide assure rapid
scalability and constant focus on results.
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Principle 3
Guarantee a business case for moving
forward and an appropriate implementation
plan
Accenture coordinates the activities of
engineering and quality management,
together with procurement, to agree total
cost and identify risks for each category with
its certified best suppliers in each region.
Accenture's global sourcing and logistics
methodology helps companies develop a
robust plan for global sourcing and logistics
that includes taking selected suppliers onboard
for pilot categories.
By taking a holistic view of the global supply
chain and leveraging our international trade
assets and capabilities, Accenture will include
in the plan logistics solutions uniquely suited
to each of our client’s sourcing circumstances
and strategic goals.
Principle 4
Mandate in-house procurement professionals
to secure data and transfer knowledge
Accenture works with integrated, crossfunctional
teams from your company to
conduct workshops for each major project
milestone. All project activities and outcomes
must be accurately communicated and
documented.
Principle 5
Integrate new suppliers into the supply chain
and optimize the flow of physical materials
Accenture minimizes disruption and
optimizes the supply chain by fully
integrating new suppliers and managing
logistics and distribution requirements, from
the moment the goods leave a supplier's yard
until they arrive at your gate. Using
Accenture’s structured approach, testing and
homologation can be accelerated and greater
visibility achieved.

How to achieve success
The success of a global sourcing
and logistics project is strongly
influenced by the dedicated
central and low-cost country
project resources. These
resources, with their focused
efforts and strong drive for
results, can provide
measurements of clear bottomline
key performance indicators
and help your organization
reap rewards. To achieve
success in global sourcing and
logistics, Accenture has
identified four crucial areas.
Sponsorship from senior management and
strong program management
Active commitment and direct involvement
by senior decision makers fosters swift
decision-making and ensures a "top down"
approach to communicating results and
deliverables throughout the organization.
A structured global sourcing and logistics
methodology should be employed using
strong program management that utilizes
cross-functional teams with specific
project-oriented targets to achieve
implementation plans.
Categories should be addressed broadly and
strategically
Project resources must be dedicated and
skilled with expert knowledge of the
category. The global sourcing and logistics
approach should be broad enough in scope to
truly make a difference but also impact the
bottom line. Category purchasing strategy
and cost modeling should be built into the
equation with an eye for all possible cost
reduction opportunities (standardization,
volume consolidation, change to
specifications and so on). Companies must
make decisions based on all aspects of the
categories, conduct fact-based and crossfunctional
negotiations, and dedicate
resources in engineering to anticipate and
focus on selected actions.
Local presence and expertise
Dedicated resources in local markets are
required to build effective sourcing
relationships with potential suppliers.
Expertise in local markets and business
practices will ensure the implementation
phase is successfully managed and
continues to integrate and strengthen
the supplier relationship.
Change management to build structural
capability
Identifying local suppliers is only one aspect
of a successful global sourcing and logistics
strategy. Often, companies experience
internal resistance to handling the issues that
may arise with low-cost country sourcing
suppliers. A strong change management
program that focuses on aligning the hearts
and minds of your operational team can help
to build confidence in the low-cost country
sourcing journey and creates further demand
that continues to improve relationships.
9

Figure 1: From strategy to execution
8
Local procurement office
Organization design & “3P IPO”
Staffing, recruiting, training
Integration to global organization
Established procurement office
7
Strategy &
planning
Supplier development
Assessment of capability gaps
Lean management program “6 Sigma”
Workshops and training
Capable suppliers
Excellence in execution
Throughout the process of determining a
successful sourcing strategy for your
organization, Accenture asks relevant
questions that drive the process forward and
tailor the solution to your organization's
unique objectives. We ask questions like:
What can your company do to realize value
from global sourcing and logistics? How are
you currently managing global sourcing and
logistics across various divisions and plants? If
your organization fully exploited global
sourcing and logistics, then how much could
you potentially save?
We work with companies to determine the
actions they need to take to realize those
potential savings. Furthermore, we help
organizations define an implementation
plan to assure excellence in execution.
Accenture's global sourcing and logistics
program is based on our extensive experience
with companies in diverse industries. The
program is structured in four key phases, each
of which contains two subphases (Figure 1).
Strategy and planning
We help you define which categories are
suitable for global sourcing and logistics,
identify risks, estimate potential savings,
build a business case and develop a
roadmap to competitive advantage.
10
Long-term
capability
development
1
Category assessment
Review of total spend profile
Country profiling
Total cost of ownership modeling
Plan of what to source where
6
Low-cost
countries
Fulfillment
Optimized logistics solution
Inventory locations
Global trade management
Products delivered to
own sites
2
Risk assessment
Country risk assessment
Industry risk assessment
Supplier risk assessment
Migration strategy
5
Supplier integration
Production process qualification
Quality & delivery assured
Order-to-delivery process defined
Supplier integrated in
supply chain
Category assessment: As part of a spend
analysis, we use an Accenture framework
to assess the suitability of each category
for low-cost country sourcing. Complex
manufacturing components, for instance,
generally require research and development
capabilities nearby, as well as exhaustive
testing and approval processes. These
features alone virtually disqualify them
as the starting point for a new sourcing
program. Simpler components, on the
other hand, are easier to source, both
from technical and risk standpoints. Our
category assessment process also includes
a "should cost" model (see page 19) that
helps evaluate the potential savings by
country and highlights indicators such as
the cost of transportation from China,
which may significantly subtract from
the initial attractiveness of a sourcing
proposition. By applying our proven
methodologies, Accenture can identify
which region is appropriate for certain
categories and recommend relevant actions
to companies that partner with us.
Risk assessment: There are many different
types of risk: country-specific risks, political
instability, spiraling inflation rates and
supply chain risks. What happens when you
3
Supplier identification
Supplier market intelligence
Supplier search
Qualification/on-site audits
Shortlist of qualified suppliers
4
Sourcing
execution
Sourcing
Differentiated bid strategies
Fact-based negotiation
Contracting
Selected suppliers
Supply chain
optimization
Copyright © 2006 Accenture
leave a well-functioning supply chain
with your habitual suppliers to select new
suppliers from different, distant cultures?
Accenture will help you assess the risk
elements, including delivery precision
and punctuality, to position you to
determine your priorities and avoid
the pitfalls.
Sourcing and execution
We help drive the complete strategic
sourcing program for one or multiple
categories. Our traditional strategic
sourcing process is now fully adapted for
low-cost country sourcing.
Supplier identification: Using our tried and
tested proven tools, Accenture can analyze
the entire range of supply options for a
specific category and identify new suppliers
in the context of the competitive dynamic
of the supply market. We are able to advise
companies on market players and rapidly
identify industry leaders. We utilize our
supplier databases to quickly locate and
screen appropriate suppliers. Using questions
tailored to company-specific realities, we
drive the request for information (RFI)
process and shortlist the "best option"
suppliers. We then utilize our quality
assurance (QA) auditing capabilities to
qualify these suppliers.

Accenture approaches global sourcing and logistics
holistically, taking an integrated view that seeks total
value—not simply reducing today's prices. We cut
through the barriers to set up collaboration. We map
cultures and skills with clear roles and responsibilities
to integrate information and practices.
Sourcing and execution
Sourcing: Taking sourcing one step further
we can help define the sourcing strategy,
bid strategy, handle the request for
quotation (RFQ), analyze the responses and
build supplier structure scenarios, calculate
savings by scenario, and evaluate pros and
cons. We then assist with the final supplier
selection. We can also help define the
negotiation strategy and conduct
negotiations when needed. Our local
procurement teams can easily adapt
negotiations to suit the local culture.
Supply chain optimization
We help integrate new suppliers into the
supply chain and to optimize the flow of
physical materials.
Supplier integration: A newly contracted
supplier needs to be integrated into the
existing supply chain framework in a manner
that assures alignment with the order-todelivery
process. A structured plan must be
put in place to address testing and production
ramp-ups. Accenture can manage the
process through to completion, from the
initial sample tests, to pre-production tests
and through full-production tests. We can
help accelerate testing and homologation
12
by involving our alliance partners in lowcost
countries. To help suppliers build a
clear vision on order placement and the
delivery process, Accenture can make use
of preconfigured enterprise resource
planning systems to make available "plug
and play" systems for remote suppliers.
We can even manage the complete order
flow using Accenture Supply Chain Services.
Fulfillment: An important part of effective
supply chain management is the ability to
analyze and make recommendations that
center on the optimal and physical logistical
flow. Defining how goods will be moved or
where a consignment warehouse should be
localized, Accenture is able to optimize the
flow from the moment the goods leave a
supplier's yard until they arrive at your gate.
Long-term capability development
Accenture can help develop suppliers'
production efficiency and quality levels.
We have the expertise to help you set up
a local procurement office in China, India
or in any other low-cost country.
Supplier development: Our collaborative
approach to relationships with suppliers
enables us to close the manufacturing
efficiency and quality gaps in no more
than six to 18 months, which we follow
up by applying Six Sigma principles and
Accenture's lean management methodology.
Furthermore, we are able to draw on our
broad skills and experience in areas like
e-learning, provided by the Accenture
Supply Chain Academy, or our versatile lean
manufacturing techniques, which
are translated into many languages such
as Mandarin.
Local procurement office: Accenture offers
companies targeted help in deciding where
to establish an international procurement
office, how to structure the international
procurement office, and the optimal way to
run it. We also help companies recruit and
train appropriate resources and fully
integrate the new procurement office into
the global procurement organization.

Procurement outsourcing
In addition to being able to manage and
run international procurement offices for
companies across diverse industries, we
offer a full outsourcing capability. We help
organizations improve their performance
across all aspects of outsourcing, whether
that involves running international
procurement offices on behalf of clients or
providing back-office management. We
handle outsourcing activities in the
following ways:
● Third-party international procurement
offices: Accenture can manage your
international procurement offices and all
sourcing activities from that particular
country or region.
● Off-shoring procurement back-office
processes: Using the Accenture Global
Delivery Network, we can reduce
operational costs. For example, the costs
can be reduced by transferring the
administrative procurement processes to
our center in Bangalore, India.
Accenture also provides companies and
governments with a broad range of
outsourced procurement services, including
category management; supplier
management; requisitioning-to-pay
processing; and application development,
maintenance and hosting. These services
can be contracted in several combinations,
making it possible for you to select the
optimal mix to meet your specific needs.
Global sourcing and logistics is driving a
need for much tighter customer-supplier
integration and collaboration along the
supply chain as supply lead times become
longer and less predictable. To assure
reliable supplies and inbound-flow
visibility, stronger links need to be
established between supply chain partners.
Accenture offers advanced supply chain cosourced
services under value-based,
multiyear agreements in areas such as
supply chain collaboration (including
supplier-customer integration, collaborative
planning, vendor-managed inventory, order
management and e-invoicing); supply chain
planning business process outsourcing; and
supply chain intelligence (for example,
advanced supply chain performance
reporting services). From our multilingual,
24x7 global user support centers, we not
only offer IT-enabled one-to-many standard
integration capability but also supplier
recruitment and integration services, as
well as supply chain workflow monitoring.
Accenture approaches global sourcing and
logistics holistically, taking an integrated
view that seeks total value—not simply
reducing today's prices. We cut through the
barriers to set up collaboration. We map
cultures and skills with clear roles and
responsibilities to integrate information
and practices. For Accenture, global
sourcing and logistics is more
than improving procurement: It is a key
component in establishing a global
footprint. By mastering execution in a
sustainable manner, global sourcing and
logistics impacts the very core of a
company's operating model.
Our global reach from bases in 48 countries
means worldwide consistency. We have
a network of high-caliber, dedicated
professionals ready to collaborate with
you to help join the dots between highand
low-cost countries. Our experience
and scale mean we can offer tools and
solutions that enable high performance.
13

Just started out or already fully operational?
Accenture can not only support your program,
regardless of where your company is positioned in
the global sourcing and logistics arena, but we
can also take you further. We can grow with you
and blur the lines between your team and ours,
share our skills with your resources, and pool
knowledge and experience to ensure you
maximize the potential value from your global
sourcing and logistics strategy.
14

Reference the following chart to consider where your company is in the maturity cycle today:
Phase
Strategy and planning
Sourcing execution
Supply chain optimization
Long-term capability
building
You might ask:
What can I source in low-cost
countries?
How do I accelerate my global
sourcing and logistics plan?
How do I integrate the new
suppliers into my supply chain
and ensure optimal logistics?
How can I enhance my
presence in low-cost country
markets?
Your current situation may be:
Aware of the potential but
little or no experience. Not
organized or equipped for
low-cost country sourcing
Disappointing returns with
sourcing activities to date.
Speed is too low. Need to
improve knowledge of the
low-cost country market.
Difficulties with supplier
implementation and
performance mean the
relationship is
underdeveloped. Delivery
precision is poor. Effects on
flexibility of production and
capacity planning.
Need to develop local
presence by defining a
strategy for each country.
Consider setting up an
international procurement
office.
The solution is to:
Undertake the category
assessment phase and
determine the most suitable
categories for low-cost
country sourcing. Define pilot
project and execute sourcing
plan.
Accelerate results by
strengthening the project
organization and get help in
driving the sourcing activities
by using a mixed team of
central and local resources in
low-cost countries.
Integrate the existing lowcost
country supply base
according to a structured
program with clear check
points. Team up with experts
to design overall logistics
flow.
Adjust organizational design
to build local presence in
major supply markets. Align
procurement organization
structure with global
operations strategy.
Collaboration without complexity
Global sourcing and logistics carries its own complexities. There
are many reasons why companies may hesitate before initiating
projects, or why they might be reluctant or unable to take their
existing sourcing strategy to the next level. Supply chain
discrepancies can be costly. Supplier relationships entail their own
sensitivities, but attitudes of resistance are not conducive to rapid
progress. At Accenture, our practical skills and proven expertise
mean that your company can begin to work differently. Instead of
advancing opportunistically when resources allow, we can help
you accelerate in an organized and scheduled manner, and bring
fresh scope and diversity to your sourcing and logistics scenario to
enable high performance.
How Accenture helped:
A construction equipment
company: Defined which
component groups are
suitable for low-cost country
sourcing. Defined complete
sourcing program, total cost
of ownership-based savings
estimations, business case,
and execution plan.
An industrial equipment
manufacturer: Achieved 30
percent total potential
savings (on landed price),
equating to $7.2 million on
quoted parts.
A global retail brand: Worked
with client to redesign overall
logistics network. Defined
program for each supplier to
synchronize production
scheduling with customers.
A consumer goods company:
Helped set up a local
procurement office in
Shanghai; defined how to
integrate office with global
procurement organization.
15

Accenture’s global network
Because we are a global organization with more than 140,000
experienced professionals worldwide, Accenture is able to design
projects that seamlessly link concept to implementation. Our local
country procurement teams position us to offer you cost-effective
methods to manage supplier relationships and transcend barriers of
language and culture.
We share our databases and repositories of constantly updated
information on products and suppliers. Companies that partner with
Accenture save valuable time by utilizing our tools and know-how
to screen and qualify local suppliers.
16

Accenture's main low-cost country procurement hubs
collaborate with procurement teams in more than 48
countries around the world.
1
China
Our China organization supports the full
range of our capabilities to achieve
superior outcomes for companies. Founded
in 1992, Accenture Greater China has 2,400
employees, of whom 1,200 are deployed to
consulting. All are based at offices in
Beijing, Dalian, Guangzhou, Shanghai, Hong
Kong and Taipei.
2
5
India
Even the most conservative growth
forecasts rank India among the world's top
five economies by 2025. 7 Now approaching
our twentieth year in the country and with
more than 20,000 employees (including
some 500 in consulting), Accenture is
well-positioned to serve diverse requirements
from a wide variety of industries.
6
4
3
Eastern Europe
Our offices in Poland, Hungary, Slovakia,
The Czech Republic, Turkey and Russia offer
the scope that European companies need
to serve their sourcing requirements. In
this region, Accenture has 850 dedicated
professionals in consulting and outsourcing
services who are helping clients reach
their goals as they strive to achieve
high performance.
4
3
Brazil
Based in a region with a collective
population of nearly 400 million, our
Brazilian offices are located in São Paulo,
Rio de Janeiro, Brasília, Belo Horizonte.
We also house Technology Solutions and
Service Centers in Alphaville, Curitiba and
Vitória. Accenture serves 14 of the 20
largest corporations in Brazil. We have
6,000 regional people who can provide the
full breadth of capabilities to develop and
enhance these global organizations.
2
1
5
Mexico
Accenture Mexico has more than 1,000
professionals based in offices in Mexico City
and Monterrey, as well as a Technology
Solutions Center in the country's capital
that has more than 300 professionals.
6
Argentina & Chile
Our reach extends to the very south, where
Accenture has 3,000 professionals in
Argentina and Chile, and offices in Buenos
Aires and Santiago. Seven out of the
10 major companies in Argentina are
Accenture clients.
7 . Source: Goldman Sachs. Excerpt from "Signposts",
Accenture 2005
17

18
Tools and assets
Accenture professionals work with you, leveraging
our tailored sourcing and logistics assets.

Capabilities assessment tool
A structured way to better understand a
company's operational model, the
capabilities assessment tool helps prioritize
the actions required to develop efficient
low-cost country sourcing activities. Based
on a short questionnaire, the tool
evaluates important sourcing capability
aspects and provides insight into areas
such as maturity level placement, actual
barriers to low-cost country sourcing
versus actual capabilities, a benchmark
against Accenture's cross industry survey
and recommendations for the prioritization
of actions.
Low-cost country
suitability model
We built our suitability model as a tool to
help assess the suitability of individual
product or component categories for lowcost
country sourcing. Key assessment
criteria include lead-time requirements,
technical complexity, "switch over"
complexity, tooling cost, transportability,
intellectual property rights and brand
image risk.
Total cost of ownership model:
The "should cost" model
Understanding what the total cost for a
certain category or product should be by
sourcing it from various countries is one of
the primary inputs to a strategic sourcing
plan. Accenture has developed a modeling
tool that breaks down the total cost and
evaluates the base line—including the
percentage of raw materials, labor,
transportation, energy cost, customs
duties, taxes and profit that was used—to
arrive at a total cost of ownership amount.
This cost structure can then be projected
into several different countries using the
Accenture tool, showing how each cost
element might increase or decrease,
depending on the chosen sourcing country.
The statistics contained in this single,
powerful information resource enable
clients to clearly see what savings can be
achieved across several low-cost countries,
helping them to better target their
sourcing regions. With the ability to
compare a range of savings, as well as
categories of sourcing, clients can more
easily prioritize and define the content of a
clear sourcing program.
Country profiles
Accenture teams in each low-cost country
have also developed a country-specific
profile that includes such details as
macroeconomic data, geographic specifics,
infrastructural maturity, core import or
export data, key local industries, logistics
costs, government policy, and so forth. We
utilize our country profiles asset to help
clients map out the most suitable country
for required categories and achieve speed
to benefit.
Risk assessment tool
Managing risk is a critical aspect of a
successful sourcing and logistics strategy.
A longer supply chain implies additional
risks that have to be taken into account to
build adequate contingency plans.
Accenture has developed a complete risk
assessment methodology that allows the
identification, the monitoring and control
of the risks.
Category workbooks
Our category workbooks contain key supply
market information, total cost models,
value drivers and successful sourcing
strategies, enabling our sourcing teams to
rapidly drive sourcing projects. Our
category workbooks are developed and
updated by subject-matter experts who
have successfully sourced the categories,
so that the information is relevant and
ready to use.
China and India supplier
databases
Our databases give you access to more
than 50,000 qualified suppliers in all
industries. Accenture has invested
considerable time and effort in locating,
contacting and interviewing companies to
ascertain core information about their
organization—including their parent
company, key customers, profile of their
customers, quality assurance certifications,
and so forth—as well as ensuring we have
an up-to-date contact name to ensure
speedy access to these suppliers.
eSourcing platforms
Accenture works with a number of key
suppliers in the eSourcing market in order
to enable the sourcing process. The global
sourcing process involves many different
parties in different places of the world so
the value of the eSourcing tools is bigger
in this environment than in others as it
enables collaboration between engineering,
purchasing (corporate and offshore)
and suppliers.
Supplier audit profiles
Accenture is able to conduct a quality audit
with any supplier, anywhere. We have
conducted numerous audits and
constructed a database to house the details
of all audited suppliers. We are fully
conversant in the quality standards
required when undertaking the audit,
taking into account the diverse industries
and appropriate versions of
ISO 9000 required.
Testing and homologation
We have the capability to manage product
testing, including initial sample tests, and
homologation processes by involving our
alliance partners in low-cost countries.
Global logistics assets
Accenture leverages our supply chain
practice and strategic relationships with
global trade management vendors to offer
our clients landed cost modeling solutions,
supply chain event management
capabilities, customs and governmental
compliance and documentation programs,
network optimization modeling, as well as
order management and customer
relationship management competencies.
Supplier development
methodology
Local suppliers usually need to improve
their quality, productivity or reliability so
there is a need for companies to develop
their suppliers to world-class capabilities.
Accenture has extensive experience in lean
manufacturing and performance
improvement and has developed a
complete set of methods that enable
companies to work with suppliers to get
sustainable improvement.
Accenture Supply Chain Academy
To ensure rapid capability development, we
can also leverage the Accenture Supply
Chain Academy, a complete online supply
chain university. The Accenture Supply
Chain Academy is aligned with
procurement roles and responsibilities and
can accurately address companies' supply
chain needs. Accenture's Supply Chain
Academy delivers better procurement
training in less time and at lower costs
than traditional training. The academy's
mission is to empower procurement and
supply chain professionals by equipping
them with targeted education and training.
19

Successful sourcing and logistics requires companies to gain insight
into local markets and strong relationships that focus on delivery. The
best solution will be supported by flexible partners with broad
capabilities that meet your changing demands across the full sourcing
and logistics scenario. The ideal partner should provide you with
expertise in supplier identification and qualification, as well as in the
radio frequency identification process.
20

Global gains
Sourcing is not risk-free, and low-cost
country sourcing can bring additional risks
to companies that are not familiar with
business norms in overseas territories or
with the complexities of commerce
outside traditional trade blocks. When
sourcing products or components in China,
you will be confronted with challenges
such as tariffs and customs duties, or the
problem of assuring sufficient storage
space on suitably scheduled cargo ships.
International logistics, impacted by
distance and shipping considerations,
means provisioning from such countries
must be carefully planned and executed.
Cost is not the only driver to better
sourcing practices. Often a broader supply
chain perspective is required, one that
encompasses integrated program
management and a clear understanding
of all the issues involved across a broad
spectrum of supply chain processes.
Companies should take a holistic approach
to sourcing, working with experienced
partners that help to scale fast.
From strategy through to implementation,
Accenture has the global scale, proven
experience and cumulative learnings from
hundreds of projects to help you realize
the potential of global sourcing and
logistics. We understand the needs of each
and every industry, the requirements of
effective supply chain management, and
the markets and products our clients need
to buy.
With Accenture's help, sourcing
opportunities have never been greater.
By collaborating with Accenture, you can
revitalize your sourcing approach and step
confidently toward achieving the status of
a high-performance business.
21

Procurement contacts
Head of Europe
Kris Timmermans
Rue Royale 145
1000 Brussels
Belgium
Phone: +32 2 22 67 211
kris.timmermans@accenture.com
Austria, Switzerland and Germany
Kai Nowosel
Campus Kronberg 1
D-61476 Kronberg im Taunus Frankfurt
Germany
Phone: +49 6173 94 99
kai.nowosel@accenture.com
Belgium, Luxembourg and
Netherlands
Dimitri Huyghe
Rue Royale 145
1000 Brussels
Belgium
Phone : +32 2 22 67 211
dimitri.huyghe@accenture.com
Denmark, Finland, Norway and
Sweden
Per Segerberg
Õstra Hamngatan 41-43
P.O. Box 2186
SE-403 13 Gothenburg
Sweden
Phone: +46 31 339 4000
per.segerberg@accenture.com
Eastern/Central Europe
Malgorzata Szulc
Sienna 3900-121 Warsaw
Poland
Phone: +48 22 528 80 00
malgorzata.szulc@accenture.com
22
France
Pierre François Kaltenbach
118 Avenue de France
75013 Paris
France
Phone: +33 1 53 23 5555
pierre.f.kaltenbach@accenture.com
Italy and Greece
Paolo Rangoni
Largo Donegani, 2
20121 Milano
Italy
Phone: +39 02 777 51111
paolo.rangoni@accenture.com
Spain, Portugal, Africa and Israel
Manuel Chaure
c/ Ramìrez de Arellano, 35
28043 Madrid
Spain
Phone: +34 91 596 6000
manuel.chaure@accenture.com
United Kingdom and Ireland
Rob Woodstock
20 Old Bailey
London EC4M 7AN
United Kingdom
Phone: +44 20 7844 4000
rob.woodstock@accenture.com
United States
Head of North America
Harlen Pyle
One Freedom Square
11951 Freedom Drive
Reston, Virginia 20190-5651
United States of America
Phone: +1 703 947 1545
n.harlen.pyle@accenture.com
Jose Morales
5221 North O'Connor Boulevard
Suite 1400 Irving, TX 75039
United States of America
Phone: +1 469 665 0000
jose.t.morales@accenture.com
Head of Asia Pacific
Jeffrey S. Russell
250 North Bridge Road
#33-00 Raffles City Tower
Singapore 179101
Phone: +65 6410 8000
jeffrey.s.russell@accenture.com
Australia
Ming Tang
Elizabeth Street
Melbourne Victoria 3000
Australia
Phone +61 3 9839 7000
ming.tang@accenture.com
Greater China
Jamie M. Bolton
30/F, Shanghai Central Plaza
381 Huai Hai Zhong Road
Shanghai, 200020
Phone: +86 21 63915588
jamie.m.bolton@accenture.com
India
Sanjay Dawar
New Delhi 6th Floor DLF Center Sansad
Marg, New Delhi 110 001
Phone: +91 11 23355000
sanjay.dawar@accenture.com
Japan
Masahisa Inagaki
Akasaka Inter City
1-11-44 Akasaka Minato-ku,
Tokyo 107-8672
Phone: +81 3 3588 3000
masahisa.inagaki@accenture.com
Latin America and
South America
Fernando Cesar
R Alexandre Dumas 2051
04717-004 Sao Paulo, SP
Brazil
Phone: +55 11 5188 5810
fernando.cesar@accenture.com
Marketing
Sergio Clerici
Largo Donegani, 2
20121 Milan
Italy
Phone: +39 02 777 51111
sergio.clerici@accenture.com

About Accenture Supply Chain
Management
The Accenture Supply Chain Management
service line works with clients across a
broad range of industries to develop and
execute operational strategies that enable
profitable growth in new and existing
markets. Committed to helping clients
achieve high performance through supply
chain mastery, we combine global industry
expertise and skills in supply chain strategy,
sourcing and procurement, supply chain
planning, manufacturing and design,
fulfillment, and service management to help
organizations transform their supply chain
capabilities. We collaborate with clients to
implement innovative consulting and
outsourcing solutions that align operating
models to support business strategies,
optimize global operations, enable profitable
product launches, and enhance the skills
and capabilities of the supply chain
workforce. For more information, visit
www.accenture.com/supplychain.
Copyright © 2007 Accenture
All rights reserved.
Accenture, its logo, and
High Performance Delivered
are trademarks of Accenture.
About Accenture
Accenture is a global management
consulting, technology services and
outsourcing company. Committed to
delivering innovation, Accenture
collaborates with its clients to help them
become high-performance businesses and
governments. With deep industry and
business process expertise, broad global
resources and a proven track record,
Accenture can mobilize the right people,
skills and technologies to help clients
improve their performance. With
approximately 146,000 people in 49
countries, the company generated net
revenues of US$16.65 billion for the fiscal
year ended Aug. 31, 2006. Its home page is
www.accenture.com.