Tuesday, June 4, 2013
TWIF Flattener 8 - Insourcing
Use one of the current events sources linked at http://svhs-hwc-fall2013.blogspot.com/2013/06/approved-sources-for-twif-current.html to find a recent news article that relates to, supports, or refutes Friedman's assertion that insourcing was a "flattener." Your comment should include the title of the news article, a link to the article, and a summary of the article including an explanation of how the article relates to this point. Don't forget to check your rubric for evaluation criteria!
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Analysis: New e-commerce strategies threaten UPS, FedEx
ReplyDeletehttp://www.reuters.com/article/2013/07/14/net-us-ups-fedex-ecommerce-analysis-idUSBRE96D04R20130714
This article Reuters discusses new e-commerce shipping methods that large companies have recently started to use. Stores like Wal-Mart and Best Buy recently have discovered that they can cut costs by housing inventory in stores close to customers, rather then keeping inventory in warehouse farther away from customers. This refutes Friedman's theory that insourcing has flattened because they will no longer need services like UPS to take over their shipping system (which Friedman uses as an example of insourcing in his book). They have cut out the middle man in shipping online, therefore making shipping more cost efficient. To summarize, insourcing has not flattened the world because insourcing is no longer needed with new developments in e-commerce shipping.
Is U.S. manufacturing making a comeback — or is it just hype?
ReplyDeletehttp://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/01/is-u-s-manufacturing-set-for-a-comeback-or-is-it-all-hype/
This article talks about how many big companies, who used to build factories in other countries (mainly China) because of lower rates, are moving some factories back to the United States. They are doing something that Friedman talks about in The World is Flat called insourcing. They are moving their factories to cut down on shipping costs. This is refuting Friedman's claims that the world is being flattened by insourcing because these companies won't need to use services like UPS or FedEx to ship their products across seas.
UPS to buy Dutch delivery company TNT Express for $6.8 billion
ReplyDeletehttp://www.csmonitor.com/Business/Latest-News-Wires/2012/0319/UPS-to-buy-Dutch-delivery-company-TNT-Express-for-6.8-billion
UPS, United Parcel Service, is not all that meets the eye, explains Friedman; they also work to take the middle man out of companies and will even go as far as to control the entire supply-chaining process. UPS, which is based in Atlanta, spreads its little fingers all over the world and squeezes itself into businesses to make everybody’s job easier and will crawl to the ends of the earth to make both UPS and the individual company profit. When the article was written, UPS planned to buy TNT, a delivery company based in the Netherlands, the second biggest company in Europe. This allows UPS to not just control the US and American companies, but stretches that control to Europe also. Insourcing, which is this process that UPS uses helps companies get bigger (or simpler, depending on the company) and better without outsourcing, even though both strategies help flatten the world. This purchase will make it easier to flatten the world by continuing with their process in Europe.
Xerox CEO: 'If You Don't Transform, You're Stuck'
ReplyDeletehttp://www.npr.org/2012/05/23/153302563/xerox-ceo-if-you-don-t-transform-you-re-stuck
This article talking about the Xerox CEO, written by the NPR Staff, explains in a section titled “On the growing number of services Xerox provides” about the benefits that Xerox provides for the individuals around the United States. One benefit would be E-ZPass. E-ZPass allows people to go throw tolls without stopping to pay. Cash is placed on the E-ZPass for this purpose. The article also explains that “…Xerox manages the infrastructure of E-ZPass for a large number of states…” When people have questions about the E-ZPass and they call to get an answer, a Xerox employee answers because they manage there. This is much like what Friedman explains in flattener #8 when he talks about UPS and Toshiba. Friedman says that when UPS has to send a computer to be fixed the people at UPS fix the computer instead of Toshiba. UPS and E-ZPass are both good examples of what Friedman is trying to portray when he explains flattener #8.
Is 'Made in the US' coming back?
ReplyDeletehttp://www.bbc.co.uk/news/world-us-canada-21541858
In this article from BBC it says that instead of outsourcing, companies are now starting to do more in sourcing, mainly because of the increasing wealth in Asia. Some people say that it is a sign of re balancing in the world. Mr. Bowman, who is in charge of manufacturing at General Electric, says that it is strictly economic and has nothing patriotic to do with it. He says that most people just look at the cost of the labour, but if you look at the inventory, warranty costs, and transportation, the cost seems to even out. The costumers will get their products much faster than if it were outsourced to China, and a lot of times, it is made better because the people working on it in America have more expertise on the product. This article relates to Friedman's statements about in sourcing and UPS. Friedman says that UPS will have employee's who specialize in repairing certain products so the product does not have to be sent all of the way back to the manufacturer to be repaired. Although the article does not use in sourcing the same way it still compares to the book. In the article it states that it is getting to be cheaper to in source because the companies do not have to pay the transportation cost to ship it all the way to China. It also says how it is much quicker to make an item in house rather than have it outsourced. Similarly, Friedman states it is a cheaper way for companies to deal with manufacturing parts and he says it is much quicker to send a broken part to UPS and have it repaired, giving the company more customer satisfaction, which helps them sustain success as a company.
Wal-Mart to Buy More Local Produce
ReplyDeletehttp://www.nytimes.com/2010/10/15/business/15walmart.html?_r=0
This article from the NY Times site is about Wal-Mart's move to make all of the produce sold in its store to be from Local farms. Wal-Mart has made the announcement that as part of their sustainability goals, and hope that by 2015 this specific goal will be met. Environmentally sustainable farming advocates and said that due to Wal-Mart's size this is a significant announcement. Nationally and globally Wal-Mart has invested $1 billion in it's perishable food supply chain. It also talks of how Wal-Mart has decided to use small to medium sized farms for this new change which falls under Friedman's eighth flattener of insourcing. One of the three ways that insourcing aided in flattening the world was by allowing the smaller fish to compete with the big ones, or in other words letting smaller companies compete with the big ones. Wal-Mart is doing just this by picking smaller farmers to supply their produce they are allowing those small farms a chance to compete with the big, national supplier type farms that Wal-Mart normally deals with.