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Procurement managers need to be aware of the hidden costs of castings made in China

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by Beroe Inc.
7 August 2014

If the engineering process of casting was not invented then modern day cars would not feature engine blocks.

The process of casting involves pouring molten material into a shapely mold and is then allowed to cool down to solidify. Once the mold is broken, the resultant solidified part is known as casting.

Automobile industry is the major consumer of castings; on an average, the sector consumes about 35-40% of total output.

China is a big player in the castings market and it controls almost 40% of worldwide output. A quarter of U.S.-based category managers, who are in charge of procuring castings, prefer to import the goods from the Middle Kingdom.

China is also one of the best low-cost country sourcing (LCCS) destinations. However, do category managers save costs by buying from China? Not always says Beroe analyst Suriya Anjumohan.

Though Chinese castings may appear cheaper from the point of view of price, there are many other hidden costs that category managers should be aware of.

Besides China, what other destinations procurement teams can look at? Lately, Mexico is evolving as an alternate sourcing destination. Category managers based in the U.S. can look to increasingly source castings from Mexico as it would save time, money and effort.

During his webinar scheduled for Aug 20, Anjumohan would focus on the key differentiating factors between Chinese and Mexican castings market.

Key Takeaway:

  • Comparative total cost of ownership of castings sourced from China and Mexico
  • Factors impacting the cost of castings
  • Evolution of casting industry and the future outlook

To view the Presentation Click Here


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