Locate where you get the best returns from people.
Why should companies invest in high cost countries and retrench staff in low cost countries? Three announcements this week highlight the thinking of management working in a global environment.
Australia has been considered a high cost country for business, mainly due to the high exchange rate caused by the mining’ investment boom’.
However, this week the IT company Evernote announced it will establish a centre in Sydney, not to grow sales (most are done on-line) but to access design and engineering talent. In Melbourne, CSL will build a blood products factory to serve the Asia market; Why Melbourne? because that is where the technical and operational expertise resides.
Meanwhile in India, Yahoo is retrenching 500 staff at its Bangalore facility. Not because they were getting expensive but because they could not deliver projects on time and on budget.
Do you see the picture – locate where you will get the best return from knowledgeable and skilled people, not where particular costs are high or low.
How does this apply to your supply chains and logistics?
Supply chains are the environment in which your business operates. Logistics is what you do to provide availability for customers. You will manage logistics but can only better understand your supply chains, so as to obtain optimum long term outcomes.
Your supply chain group is where the analysis, modelling and simulation will be done. It can be located wherever you get the best returns from knowledgeable and skilled people.
The people you need to attract to your supply chain group will:
- be recognised predominately for their specialist skills and qualifications, but also be continual learners and expect support in their learning
- have a global perspective concerning supply markets and supply chains
- have an adaptable work style; be able to operate with different cultures and multiple generations of colleagues
- respond to work cultures that attract and retain talented staff and recognises the performance of teams
This is similar to the requirements for IT software developers and research scientists.
This new type of strategic supply chain group will be positioned to recognise changing business circumstances, structure teams to respond to new supply chain challenges and develop problem-solving approaches. Is this the approach of your organisation?