Right Shoring
Tuesday, July 17, 2012 at 1:05AM A recent issue of American Shipper had the two word title: Right Shoring. These two words said it all. There was almost no need for the the subtitle "Global cost structures have manufacturers re-evaluating outsourcing phenomenon."
It had to come. In the pendulum world of business fads and phenomenon, we could not Out-Source jobs fast enough in the earlier years of this century. It goes without saying that we did it with gusto and apparently to excess. We created that “giant sucking sound” that H. Ross Perot said during a presidential debate in 1992 and was summarily lampooned for. http://www.youtube.com/watch?v=Rkgx1C_S6ls
We could not Out-Source and Off-Shore fast enough. This was undoubtedly an equilibrium adjustment on a global scale and at a rapid pace. The smaller, highly interconnected, world of commerce, however is a two edged sword. As fast as jobs were being outsourced from the US and Europe, the faster equilibrium was being reached. Once reached, the gains become harder to realize, if not outright non-existent. What to do next? Right Shore! It’s obvious.
The title of this article reminded us of a similar phenomenon from the 1990s: Reengineering. This movement was fueled by a popular book by Michael Hammer and James Champy entitled Reengineering the Corporation: A Manifesto for Business Revolution. While the key word was called Reengineering, the practical application was to reduce head count. Reengineering became better known as Downsizing. As it goes with many of these business fads and phenomenons, Re-engineering er... Downsizing took off like a rocket. Whenever a project was given either moniker, people became scared for their jobs. The spent more time worrying, talking about it, and acting politically for their own survival.
The Reengineering/Downsizing method reached its pinnacle with the 15 minutes of fame of Al “Chainsaw” Dunlop in the late 1990s. When he went from darling of Wall Street to devil, the Downsizing movement came to a halt. We had gone too far. So, we renamed it: Rightsizing! What else.
As the great Hall of Fame catcher and philosopher Yogi Berra said, “It’s like deja vu all over again.” And yet, we never really learn.
The difference here is a basic belief of a class of executives that everything is better at the extreme. If more is better right now, a lot more must be a lot better. If less is better, a whole lot less must be a whole lot better. We will go for the extreme and pass right be the optimal level of performance without batting an eye.
We are not talking about pushing the envelope or setting stretch goals. When done right, these kinds of challenges can motivate organizations to accomplish what was thought to be impossible. No, we are talking about extreme, obsessive, and compulsive dedication to driving down costs at the expense of everything else. This kind of Dunlapian behavior can destroy a perfectly functional company.
By the way, the American Shipper article is worth reading.
http://www.americanshipper.com/Main/News/Right_Shoring_49917.aspx
What are your experiences in Off-Shoring? Are you now Righ Shoring?
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