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Companies in advanced economies we're shocked to see suppliers in Asia...

Companies in advanced economies were shocked to see suppliers in Asia and elsewhere simply disappear as orders from abroad contracted. In China some 67,000 factories went bankrupt, according to that countrys authorities, in the first half of 2008even before the U.S. financial crisis sent the global economy into a tailspin.

Outsourcing and subcontracting are rife in localization at a number of levels.

Typical practice for global scale MLV's is to subcontract to SLV's on a language-by-language or region-by-region basis. The problem for the company procuring the localization services is that they are disconnected from those SLVs and have no way to predict the stability of the companies that are actually going to be performing the work.Procurement departments and selection committees will often spend a great deal of time reviewing financial stability of a potential localization partner work which is rendered useless if the actual production is performed by a completely different organization.

You know (alert, side tracking!) just when you believe you're totally immune to ads you hit an advertisement that somehow captures your attention. I just noticed an awesome advert for a world-class Toronto based wedding photographer. I'm thinking they ought to get the mention 🙂 Ok, i'm sorry folks, returning to the topic at hand.

I would recommend anyone tackling a vendor consolidation to start begin asking questions that will identify stability issues not just at the MLV / master contractor level but at each point in the production supply chain. Here are some key questions:

    • request third-party validation of each sub-contractors financial health and it's sales or operational history,


    • ask to see references from other or past partners,


    • ask to see ongoing processes for tracking sub-contractor risks (a buyer, for example, should want to see a map of the partners supply chain including contingency), and


    • develop backup options for each important sub-contractor.

Having confidence in a trading partner means having confidence that the partner knows what to do in the event of a breakdown in their subcontractor supply chain. Where subcontractors are part of the equation, as Josh says,

These practices will give both sides greater confidence that a crisis won't wipe out their trading partners and leave them scrambling to find new ones.

I've got to give the deserved credit with regard to this article in part to I actually got the idea as a result of something I read on their site.

Thank You To - Thank you for selflessly giving your know-how. - Your understanding is definitely impressive. Many thanks for giving 🙂 - One of my personal favorites.

Posted in Business Post Date 11/01/2015






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