Successful companies ask themselves, “What must I keep at home?” rather than “What can I send to LCCs?” The burden of proof shifts from the LCC advocate (often procurement) to the existing producer (manufacturing), which now needs to prove – and improve – its own competitiveness. Best-practice companies investigate and communicate the LCC options and costs, specify the target costs that will be considered competitive, and then give the organization a reasonable chance to meet or beat the target internally. Usually the organization will increase its efficiency and justify keeping a fairly large portion of the supply chain in-house.
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