“Globalization is the process by which geographic constraints on economic, social and cultural arrangements recede, thus increasing our global interdependence.”
Branson R. (2007) Globalisation Laid Bare, p 39, Gibson Square, London
If we stop to consider the growing connectivity between nations, beyond using silk sourced from China to create a blouse in London to be worn at a Paris fashion show, we realize the emotional or economic impact of geographically dislocated events, either as individuals or nations! For example, 9/11, the underground bombings in London, and the price of oil extraction has on transportation globally. Increased travel, both real and virtual via the web and social media, have expanded intercultural awareness. However, life is such a complex weave and we are so focused on immediate personal matters that we often fail to see the horizons or connect the dots.
I recently sat in on a panel discussion about manufacturing, transportation, and construction titled “The Making of America”. Cheap labor in Asia sucked manufacturing across the ocean along with other services that were feasible to outsource, such as help desks, data storage, even your drive-through big Mac order! This resulted in a deficit of those jobs here in the USA.
Currently, about 1/3 of the companies that outsourced production are now looking to bring it back home. For example, Walmart is growing their own cotton to use when they manufacture towels here in the USA, which they then package and deliver to the retail outlets.
Manufacturing requires the construction of plant and machinery. Finished products need to be packaged, stored, and transported to the customer. Quickly. Each phase requires workers with various skills.
Then add in some government initiatives, like the “No Child Left Behind” Act. No Child Left Behind was a well-intentioned policy to protect and ensure children have access to education. The repercussions of that are extensive and require another blog. However, follow the ripples and you see that there is a greater impact.
These panelists, whether they were in transportation, manufacturing, or construction, were quick to share the decline in young people looking at the multiple jobs open in their specialty areas.
Apparently little is done to educate students about the opportunities and benefits of a trade, or the sophistication of manufacturing in the 21st Century. This is also fueled by parents who want their children to go to college; it has greater appeal and social status than being a “blue collar” worker. Unfortunately, some of the statistics on college dropout rates would indicate that not everyone is college material. A gap in the education of students and families has been identified. Industry leaders and the government need to raise awareness of the opportunities and value for tradesmen and create apprenticeship programs, or co-op schools where the students split time between studies and work experience, thus validating other routes to success.
The goal of these organizations is to maximize efficiency, increase speed to market, and minimize costs, particularly freight and fuel. Security risks lead to rising cost as does inventory warehousing. Warehouse management systems are changing with the growth of vendor management systems. The CTPAT (Customs Trade Protection Certification) alleviates risk in the supply chain, thus making delivery safer.
Transportation is costly, in terms of purchasing and maintaining vehicles, adhering to the austere rules and regulations, and the tracking and recording of approved hours and rest times.
Organizations are choosing to focus on their core business skills and outsource transportation to smaller logistics companies with a good safety record, some tracking ability, and a good delivery record, This is not easy for big companies to find. With a small fleet of vehicles (most have 50 or less), this means multiple drivers on shorter routes. There is encouragement for smaller businesses to form partnerships across the country. The big players are reluctant to represent more than 30% of the revenue of a small business and so their advice to small business was “stop competing for $2 million contracts partner up and come for $20 million.”
Connecting the dots. It sounded like an abundance of change to me: multiple players interconnecting, multiple systems recording a huge amount of data, business process re-engineering, data storage, data analytics, and positive outcomes required in terms of saving time and resources while meeting delivery goals, retail goals, and supplier diversity goals.
netlogx – we do that.