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Eastern Europe -- A Cooling Trend?
One alternative to China, it seems, may be on its way out of the low-cost country sourcing race. Central and Eastern Europe, referred to in an article from Supply Excellence as "CEE" (like we need yet another acronym in the business world), has a number of advantages. According to the article, workers in that part of the world are closer to Western Europe than their counterparts in Asia (read: China, and now India), are more likely to speak our language, and are members of the EU.
But cost of labor there, while still cheap enough to be a bargain, is going up, which is going to turn some supply chain managers off in the next few years. China, by contrast, is not going anywhere. Many managers have told me that the country has some disadvantages, namely that most of the manufacturing centers popping up over there are in a small sector of the country, an area that is rapidly becoming saturated with foreign companies angling for a foothold.
The article above references a story from The Economist, China's infrastructure is growing rapidly, with a new airport, a very modern highway system, and more opportunities for shipping. Since it's arguable that Eastern Europe (excuse me -- "CEE") has already had rail, shipping, air and highway systems in place for some time, it seems more and more likely that China will quickly outpace the former Iron Curtain, if it hasn't already.
Eastern Europe -- A Cooling Trend?
March 6, 2008
One alternative to China, it seems, may be on its way out of the low-cost country sourcing race. Central and Eastern Europe, referred to in an article from Supply Excellence as "CEE" (like we need yet another acronym in the business world), has a number of advantages. According to the article, workers in that part of the world are closer to Western Europe than their counterparts in Asia (read: China, and now India), are more likely to speak our language, and are members of the EU.But cost of labor there, while still cheap enough to be a bargain, is going up, which is going to turn some supply chain managers off in the next few years. China, by contrast, is not going anywhere. Many managers have told me that the country has some disadvantages, namely that most of the manufacturing centers popping up over there are in a small sector of the country, an area that is rapidly becoming saturated with foreign companies angling for a foothold.
The article above references a story from The Economist, China's infrastructure is growing rapidly, with a new airport, a very modern highway system, and more opportunities for shipping. Since it's arguable that Eastern Europe (excuse me -- "CEE") has already had rail, shipping, air and highway systems in place for some time, it seems more and more likely that China will quickly outpace the former Iron Curtain, if it hasn't already.
Posted by Sean Murphy on March 6, 2008 | Comments (1)
March 6, 2008
In response to: Eastern Europe -- A Cooling Trend?
Manager commented:
In response to: Eastern Europe -- A Cooling Trend?
Manager commented:
Our sources indicate that China labor costs in certain industries are going up too. This is a constantly evolving game of "relative cost advantage" - which requires ongoing monitoring of local total costs (not just labor), exchange rates to your currency of interest, changing risk management, etc.
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