Where do activities belong?
Increasingly, the economic process depends on structures built upon alliances, joint ventures, and outsourcing. Structures that are built upon strategy, rather than ownership and control, are becoming the models for growth in the global economy. Executives in these partnership structures should organize and manage corporate strategy, product planning, and product costing as one economic whole.
Take for example, a leading global manufacturer of consumer goods. Formerly the company assumed that the more in-house manufacturing it did, the better. Now it is asking, “Where do activities belong?” So, it has decided to place finishing activities into many of the 180 countries where the customer is located. But it produces itself fundamental compounds for the products only in a few regions of the world. For example, a large plant in Ireland serves all of Europe and Africa. The company is in-sourcing the basic compounds to achieve quality control, but it is outsourcing final assembly. It is looking at the entire value chain and decides where to place various activities.
ACTION POINT: Think about your job. Could someone else do it cheaper and better? If so, develop a plan to get new skills to move up the food chain, by reading, doing research, and talking to people.
Management Challenges for the 21st Century
From Data to Information Literacy (Corpedia Online Program)
* Source: The Daily Drucker by Peter F. Drucker