India and Logistics
August 18th, 2005From the latest Supply Chain Digest First Thoughts
Think about it – why won’t someone start “Demand Planners Inc.“ in Bangalore, staffed with a bunch of brilliant forecasters with PhD’s that speak English impeccably?
Its true, “outsourcing” is spreading to everything. I know a trucking carrier/broker startup that is planning on outsourcing a lot of itself. They have live video link ups between the US and India.
Technology will have a huge effect on this as the article alludes to. I always maintain that technology pretty much sucks now in logistics and SCM. Everything is very expensive, high barrier – which is the wrong model. Think how something as simple as RSS could change the industry. What a great way to keep people abreast of whats happening throughout the supply chain! (Sidenote: Thats why we integrated it into DocShot – so its possible get feeds of your documents going in and out of your organization). Or look at how IM is changing things. As things move to completely digital, your physical location matters a whole lot less (I say this as someone who spends nearly all his time working from home).
Do you believe traditional supply chain jobs in planning and execution could be outsourced to lower cost countries? What would be the barriers? What should SCM professionals do to minimize the chance that their job goes to India?
Absolutely, outsourcing will change things. Ultimately, you need to find something that you offer the most value at. If someone else, can offer more value then you – here or in another country – you should take a look at what you’re doing.
August 18th, 2005 at 3:08 pm
It will happen, but first you need to have a couple of things happen.
The culture in India as I understand it is very different than that in the US and in other ‘western’ countries. Until this barrier is overcome you will not have the high level ‘innovation’ type jobs move over, as the role the outsources are taking are ‘doers’ not ‘thinkers’.
The second is for the supply chain industry to leverage outsourcers in their own country. Is this happening?
Do companies have enough trust in 3rd parties to handle such a strategic part of their business?
The third point I see is the turning on a dime part. If you can define the job to a suitable level of detail, and make it so it doesn’t change very often, then it will be outsourced, otherwise it will be too hard. Video’s are fine, but timezones suck.
August 22nd, 2005 at 1:20 am
The whole outsourcing thing is the most lamely overrated trend since Pet Rock and Bell Bottoms. I’ve worked with companies that thought they were saving a ton of money by outsourcing to India, and guess what? They wound up having *higher* costs and lots more frustration. It’s costly to set up the communications links and subcontracts with India, even more costly to train the Indian workers who (as you say) have a different educational and cultural background even if they do speak fluent English and French and Spanish or whatever. Plus, you need to hire *lawyers*, lots and lots of them to manage the overseas transactions which are insanely arcane. And there are also legal issues with info theft in India as some British newspaper pointed out months ago.
Ultimately, though, while there are a lot of very good Indian workers, there are also quite a few guys out there who aren’t terribly skilled at their jobs, do a crappy job with their programming and wind up costing the American firms even more in clean-up costs (while, of course, the costs of the Indain workers rise every day). The firms spend all this money on offshoring their programming, then wind up having to pay US programmers anyway to fix the problems! How stupid is that? You get what you pay for, and the US companies fantasizing about offshoring all their jobs are merely sacrificing quality for lower expenses.