Monday, June 05, 2006

Volume 23 - Out Sourcing - Free Trade

It wasn't too many years ago, heated discussions took place over the use of 'robots' within the workplace. The unions screamed, the newspapers went wild, the liberals cried, that the sky was falling over the potential loss of jobs. Sounds very similar to the same 'song and dance' being heard today over 'outsourcing'. We read and hear that because of 'cheap labor', we're destroying our middle class. We read and hear that the government should limit free trade and somehow 'outlaw' private and public companies from outsourcing.

But, just like the discussion of the 'robots', it's panic induced with fear stories of 'local' events, and not facts that effect a national economy. As in all topics that have 'emotional' involvement, volumes of prejudicial opinions abound as soon as 'trigger' or 'hot' words are used, especially by the media. Words and phrases, each with their own predetermined viewpoints, used to gain advantage, or worse, to confuse, clutter and inflame a sensitive topic. Just another example of the media, 'making the news' and not reporting it. Words and phases as 'Merger and Acquisition' (M & A), 'globalization' (next volume's topic), 'pressures to reduce costs', 'sourcing competencies', 'strategic sourcing initiatives', 'improve supplier collaboration', 'optimal sourcing allocation decisions', 'global economic instability', 'knowledge sharing capabilities', 'front office/back office reduction', are only examples of this delicate and sensitive subject.

Here are some facts and a peek into the future: You may not like it that someone in a foreign county is taking your 'customer service' or 'warranty' type call, but it 'may' actually lower your price and increase your service, that is , at least, the hope of the company. This applies to claims, warranties, loans, and any service type product in which a voice is necessary to respond. Companies maybe making a mistake using a voice that isn't accented to 'our norm', but that is their internal company problem, or challenge, and not the issue at hand, and certainly not a governmental decision. The positive or negative results will be determined, as it should, by the marketplace. For example, I just had a duplicate billing on my company credit card, and it took me four phone calls to finally find someone that understood, in English, what I was saying and the willingness to do something about it; after my call went through numerous countries and was disconnected three times within their established process to solve this problem. Nevertheless, it is my choice to get rid of that 'card' company, if I so choose, and find one that is more responsive to my needs. A 'market place' decision, and one in which, I will consider.

Other examples include the importation of foreign clothing, which has given us more choices for less money, so a family benefits where it counts, in their check book. Sam Walton: "Made in America", published by Doubleday and copyright (c) 1992 by the Estate of Samuel Moore Walton, is a book that describes Sam Walton's philosophy of life and business advice, but fourteen years later WalMart's philosophy toward sourcing of product is drastically different. Company choice, and according to their 'full' parking lots most people agree, regardless of where the products originate.

And finally, with regards to manufacturing, the 'hotest' and most 'sensitive' of subjects, the facts remain that if sourcing is necessary for not only a cost benefit, but one of service to the customer, and growth on the companies part, that decision to import parts, or to move to another country is still a decision of free enterprise with the result, success or failure of a company, determined by the marketplace, and not a governmental agency; with the exception of those companies that have acquired local, state or federal funding including all types of property tax rebates, and have not repaid that source of funding in full. In the sixties there were three automobile companies in the United States. Today, there are three times that amount, and only two owned by U.S. companies. The next volume is 'Globalization' and a full discussion of the above will be presented.

With regard to workers, pay, health care and future, and all those inflammable topics that appear on the news, let me use our new startup company, Independence2 LLC, as an example. All our products will be manufactured in foreign countries, under a private label, and our 'members' (employee-owners) will make equal too, or more, than industry standards, will own a 'piece' of the company and are building wealth, not simply 'hitting' a time clock. We've established ownership, accountability and wealth into this formula, not just a job. Where can a sales person, for example, do better, than with us, knowing that he's not prostituting himself, but actually owning part of a company? Where can a 'shipping' employee work, where he is not only invited, but expected to sit at the conference table and go over 'financials', sales strategies and operational performance detail, and be asked his/her opinion?

Outsourcing can create opportunity. It might be harder to see the benefits of free trade, because those benefits aren't news worthy in this day and age, of hype and ratings news. But, understand this, it is a company's choice and responsibility to make decisions, good ones and bad ones, and that is the risk that one assumes as an employee of a company. And remember, that risk is directly proportional to ones education and ability, and the less of both, that one 'carries', the more at risk one becomes. Don't look toward Uncle Sam, in the 21st century, to build walls around this country, other than for immigration purposes, and isolate the United States economically from the rest of the world. One had, therefore, better understand the benefits of higher education, no matter the cost. 'Dummies' aren't going to make it. As I stated, in Volume 13 - Importation of Goods - Trade Imbalance - Why and How?, "Our educational system pales in comparison to high achieving countries. Our educational system has stopped being competitive. Our educational system and its non-competitive mentality is root cause for our inability to be a manufacturing leader in today's global economy."

One last comment, outsourcing does become an issue when companies hide from their employees and customers the decisions to outsource parts, pieces or even new products, and even worse hides this deception in 'red, white and blue' boxes. There is nothing more sickening then to see and read 'public relation' crap, printed or spoken, to hide the truth. As I stated in Volume 2 - Nationalism, Customer Satisfaction & Accountability, "I'm talking about Presidents and CEO's of companies waving the 'buy American flag' who damn well know that in their private meeting sessions they are advocating purchases of parts or products from Asia, India and Mexico with their other divisions already having products going to the same customers that have no 'made in America' connection whatsoever. If you gain a competitive advantage by purchasing a product or part overseas, then by all means do it, but don't lie about it. Be 'up front', tell the truth and by all means keep 'old glory' out of the story. She deserves much better then to become a prop in your sad play."

You're going to love the topic of Globalization!