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Vol 30 - No 06 - September 2004 Migrating to Low Cost Countries: Taking Away the Pain and Maximising the Gain The trend towards moving operations to low cost developing countries continues to accelerate. The list of manufacturing companies who have now set up operations overseas includes many household names, Dyson, Dell, Daimler Chrysler, Philips, Whirlpool, Bosch and Siemens among others. They have all been attracted by labour, overhead and infrastructure costs that are a fraction of those in the West, a rapidly developing skills base and fast growing markets enhanced by China’s entry into the WTO and Eastern European block entry into the EU. When considering the cost and market potential, the business case for relocation often looks very attractive and it is easy to get carried away with all the hype. However, companies often fail to take account of the significant risks associated with undertaking the transfer. There are many examples of the challenges they face: So why are companies so often dissatisfied with their migration? Based on a large number of relocation projects into Eastern Europe, the Far East and South America, we believe that problems typically lie in one of three areas:  An inadequate business case Poor management of the risks during the transfer itself  A failure to establish best practice processes at the new location. Page number: 24 Word count: 2400 Related Topics: Outsourcing Strategic
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