Outsourced manufacturing or foreign market joint-ventures can be applied to cut the cost advantages of an Alien Invader. Eliminating in-house enterprise capacity can simplify administrative and inventory overhead, as well as reduce future liabilities. This enables a faster ramp to large scale production (by partnering with the competition).
Enterprises are moving talent and operations close to the markets they serve. Instead of “national companies serving a global market” they are becoming “global companies serving local markets”. Enterprise Agility can be increased by removing functions, reducing headcount (administrative) and costs. Caution reducing costs (labor, contractors) is needed to avoid increased political, regulatory, and financial costs. Conversely, assured plant continuation can increase state, federal/national and local (city), and union support for incumbents.
Enterprises can employ a few simple tests: How much exposure to key markets do “up and coming” staff (management and contributors) get while growing? (Speaking the cultures, directly interacting with customers, building relationships in markets). Does local-market staff view the needs and wants of their market at variance with “global needs” produced by central staff? (Deviations from ‘central budgets’ and ‘PLM’) Does significant talent and time get taken up mapping ‘voice of the customer’ to global and centralized views of plans and execution metrics? (Reconciling local to global instead of building global from local)
The details of just how to leverage your geography and workforce are far more complex than we have space to cover here. If you’d like to talk with a senior analyst reach out to us www.ekalore.com/contact.
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