international sourcing Archives

Not very long ago, companies that were looking to hire highly-skilled talent were limited to candidates that lived within a certain area of an office location.

However, nowadays, an organization can hire the exact talent or team if they need them for a specific project, and it doesn’t really matter if this person or team is located near their office location or halfway around the world. Thanks to modern technology, the internet, and lately COVID-19 and the influx of remote work, accessing experts is easier and more affordable than ever before.

Outsourcing is a new trend. The two main reasons that organizations decide to outsource are to reduce costs and to have the ability to focus on business goals and planning. But lately, outsourcing is more than just saving money. It’s seen as a critical tool in innovation.

As a result of this, business owners and entrepreneurs from around the world are seeing forward outsourcing to Southeastern Europe as the new outsourcing destination for many reasons and advantages that build and enable better collaboration & communication, apart from the lower costs.

Kosovo is also one of the top locations that has gained a lot of recognition for outsourcing services that is growing stronger day by day.

We may ask ourselves why we should consider outsourcing to Kosovo. Can Kosovo maintain a high quality of services while the costs are low?

Well, there is an enormous range of benefits when outsourcing IT services, customer care, market research, and other shared services to Kosovo, check out below the following advantages:

1. The population is one of the youngest in Europe

As we know, Kosovo is a country shaped by its youth, who are well-educated, highly motivated & satisfied with their work. The work-force is characterized by the high literacy of foreign languages, such as English and German. Almost every citizen in the workforce now in their mid-20s, speaks and writes fluent English, often with an American accent, and being in the GMT+1 time zone makes for a perfect staff augmentation scenario.

In addition to this — because of the number of young people in employment and the political involvement from the UK, USA & Germany — the country of Kosovo has a heavy focus on education and training, meaning that most IT trained employees will have certifications, that would cost a large sum of money elsewhere, already achieved and will hold in education typically at least one if not two bachelor degrees in addition to a masters degree at an early age.

They also are characterized by a very rapid cultural and intellectual adaptation with people of different backgrounds. This is a great advantage when it comes to working with different companies abroad.

2. Strategic location

Kosovo is an attractive destination for nearshore outsourcing services due to its strategic location as they say “Kosovo is located in the heart of Europe.” The close proximity of Southeastern Europe allows for regular and cheap visits for both parties. The duration of the flights is also a big advantage. For example, the direct flight from Berlin to Pristina is around three hours. This is very important, especially for long-term cooperation. Because, we would love to have our partners or clients come over for visits every time they see it necessary, so they learn more about us or with whom they’re working.

Also, the weather is one of the best things in Kosovo. During the wintertime, you get to experience the real cold and a lot of snow. Summers are usually hot, and very enjoyable. You get to visit a lot of places which in the summer can be very delightful, you can take the time to go out for a beer or dinner with teamwork because the sunset is usually set-down around 9 p.m. And so, this is how u get to know Kosovo as an outsourcing-friendly destination.

3. Attractive Price / Cost-cutting

The most obvious reason for outsourcing to Kosovo is the cutting of costs. Outsourcing companies in this region pay their employees lower wages. Outsourcing also brings significant reductions in capital investments – you only pay for the work that you need to be done and don’t have to worry about any additional overheads. You also can be able to invest your capital in other departments, leading to increased profits and greater growth.

Conclusion

For the past couple of decades, the prosperity in outsourcing services has furthered, significantly due to the improvement in applied sciences such as telecommunications, technology, fast-paced and competitive environment. Outsourcing is a very important aspect of the business now. In the same line, these improvements have followed Kosovo as well. A well-equipped country in terms of multilingual and well-educated youngsters that make more than half of the population, technology trends’ acquisition and low costs, Kosovo is your next place for outsourcing!

Source: https://outsourcing-journal.org/10-facts-about-kosovo-as-sourcing-destination-for-it-services/

As companies strive to provide the highest quality and service at the lowest cost, global supply chains play a vital role. Companies often approach their global supply chain planning with a “do it and forget it” attitude, expecting that a detailed identification, verification and qualification process will not require frequent revisits of past decisions. Global political climates, tariff wars, and the recent COVID-19 virus outbreak continue to illustrate the urgent need for supply chain agility, risk management and contingency planning.

Sales & Operations Planning (S&OP) is a mid-term tool to ensure alignment among corporate strategic objectives, whereas Sales & Operations Execution (S&OE) is a tool to ensure balance among supply and demand. The flexibility of S&OP allows for an organization to look for imbalances at intermediate levels in a product hierarchy without getting “lost in the weeds” at detailed SKUs but not at too high of a level to be less meaningful.

In order to review this supply and demand balance, one must create supply planning groups and a structure based upon the critical success factors for delivering high levels of service. These planning groups could be internal manufacturing groups, make/buy items, a specific external supplier, or country of origin groupings. Given the extended lead times for international supply chains, S&OP is an ideal process for looking several months out into the future to perform risk analysis.

Strategic Considerations for International Sourcing

Companies initially evaluate their strategic objectives when pursuing an international sourcing initiative, but this should be revisited on a regular basis to ensure that the chosen supply chain continues to meet the companies’ needs. The lowest total cost of ownership is the primary objective, yet as manufacturing has declined in Western economies, the only source for production is often in the younger global economies such as China, India, Malaysia or countries of Eastern Europe.

Over time, labor rates and raw material costs in these countries have fluctuated due to global supply and demand. Combined with changing prices for the underlying commodities in those local markets, companies are facing more frequent price instability. Additionally, tariff uncertainty or increases force a regular review of the global supply chain to ensure strategic objectives have not changed and are still being fulfilled.

Supply Chain Complexity vs. Diversification

It is easier for a supply chain team to manage a single production site within a single manufacturer or at least from within a single country of origin. The obvious downside to that approach is that if that country is subject to a sudden tariff spike, an organization can quickly find itself with no choice but to accept the increase in costs and a likely impact to margins. As a potential alternative, a company can pursue a dual country sourcing strategy where it can cost-average its pricing to mitigate the short-term impact. Over a longer-term, a purchaser has the opportunity to switch volumes between suppliers/countries to mitigate those impacts.

How can S&OP help?

By its very design, the S&OP process is an ideal vehicle to prompt a company to ask the necessary strategic questions on a regular basis. In addition, a robust S&OP process takes into consideration changing costs and gross margin impacts to the bottom line to ensure gross margin or revenue targets are met. Stepping out of the day-to-day S&OE during the S&OP process allows for that broader perspective to evaluate “what-if” situations that could impact costs, demand, supply and margins before they reach fruition. In this manner, S&OP is a useful scenario-management tool to look at these cost changes, price increases and estimated adjustments to volumes at an aggregate level to quickly identify the potential impacts to the bottom-line without having to perform a time-consuming SKU-by-SKU analysis.

Contemporary S&OP tools often have scenario-modeling capabilities and increase the speed and accuracy of these strategic evaluation exercises. However, depending upon the scale and scope of a company’s supply chain, an expensive tool is not always necessary. Well-designed spreadsheet models populated by databases may be a sufficient starting point for a business. No matter what tool is utilized, the S&OP process is designed to identify potential issues and act as a launching point for projects elsewhere in the organization to identify methods for addressing those issues in the most cost-effective manner.

Companies with well-designed and utilized Sales & Operations Planning processes have well-demonstrated benefits of:

-Reduced stock-outs, driving higher service level

-Lower variable labor costs

-More efficient raw material, work-in-process and finished goods inventory utilization

-Lower transportation and material acquisition costs due to more stability

-Higher gross margins

-Increased top-line sales

Strategically including tariff management and other global supply chain variables in the S&OP process to evaluate possible impacts to the supply and demand balance, as well as cost structure, is critical to ensuring the continuity of supply necessary to provide high levels of service and cost management.

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Paul Baris is a supply chain expert with over 30 years of experience in the industry as a Vice President of Supply Chain for several companies as well as a consultant implementing Sales & Operations Planning, Inventory Strategy and Demand Planning practices.

Paul’s strengths include: Operational Performance, Root Cause Analysis, Lean & Six Sigma Methodology, Client & Vendor Liaison, Leadership, ERP, Strategic Procurement, Project Management, Warehouse Redesign/Implementation, Supply Chain Engineering, Statistical Process Control, 3PL Management, WMS, Demand Planning, Inventory Planning, Change Management, S&OP, and Operational Layouts. Paul is a certified supply chain professional from APICS and has a Certification in Supply Chain Management from the University of Tennessee. Paul’s professional certifications include: Change Management – Prosci ADKAR, Professional Negotiation – Karrass, Juran on Quality I & II – Kepner-Tregoe, Strategic Procurement – Stanford University, Statistical Process Control, Purchasing Strategy, Oliver Wight S&OP, and S&OP Implementation.

Why You Should Outsource in Kosovo