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When supply management professionals hear the term low-cost-country sourcing, many immediately think of China or India. However, there is another region that holds equal promise in the marketplace for U.S. multinationals--Eastern Europe. Comprised of more than 20 countries and 400 million people, economies in the region are growing at a rapid pace. The growth potential and market development outlook is even more positive for the 10 Eastern European countries that have joined the European Union. Their accession to the EU means a united front with EU members in Western Europe on such things as environmental regulations, intellectual property protection and legislative decisions.
The United Nations classifies Eastern Europe as a subregion of Europe that includes the countries of Belarus, Bulgaria, Czech Republic, Hungary, Poland, Republic of Moldova, Romania, Russian Federation, Slovakia and Ukraine. However, the Balkans and the Baltic states are also considered part of the region. What supply management executives will quickly realize once they examine each individual country is that great inconsistencies exist among countries in terms of economic development.
Jim Rank, advanced purchasing manager for Keykert USA in Wixom, Michigan, says he's been working with Eastern European suppliers for the past six years. He views the business climate as a buyer's market, with a significant amount of open capacity within the plastics and metals categories that Keykert purchases. "The region's greatest strength is the amount of manufacturing capacity available and an educational system that has a focus on engineering and manufacturing," says Rank. "I also believe the cultural differences are not as severe as some of the other low-cost regions."
Source: Inside Supply Management, http://www.ism.ws
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