Offshoring and Supply Chains

          Every decision a competitive company makes is to satisfy and build up ‘number one’-the company.  Including its name, its product, and especially its financial state.  Both outsourcing and offshoring are simply a concept developed by companies to improve all three of these.  Outsourcing is simply taking a step in the production that could have been done by them ‘in shop’ and shipping it to another location to complete the job for less money in less time.  Offshoring on the other hand is completely picking up the entire business and moving it to a location that would provide greater opportunity to produce a product with less money.  China is one of the most preferred locations for offshoring, which would explain why ‘Made In China’ is found on seemingly every product we purchase here in the United States. 

Another tool that has flattened the world are supply chains.  Before reading this section of the book I didn’t realize there was an actual term for a brilliantly mastered system designed solely to meet supply and demand needs, however, that is what a supply chain does.  Wal-Mart is the perfect example of a well-greased supply chain- it is the best in the world.  When products are purchased from a Wal-Mart information is sent directly to the database signaling, ‘hey! This product is in hot demand, we need to make more!’ More materials are made, and then shipped (all through an electronic track and scanning factory) directly to the Wal-Mart in need of the products.  However, to take it a step further, Wal-Mart hardly makes the products.  They are a huge base for thousands of companies to ship their product to, to have sold in Wal-Mart’s stores.  There is a great need for close observance of the sales and returns.  In my opinion Wal-Mart has been so successful simply du to its ability to make minute adjustments consistently in order to beat competitors.

These amazingly intricate and hard working supply-chains do more than just keep shelves stocked, they give businesses a fair opportunity to sell product without having to create their own stores.  What an opportunity it gives not only Americans, but also people from all around the world to have a job by creating new things to be sold.  However, many jobs have been dissolved simply due to the increase in technology.  As mentioned earlier, there are machines that do the majority of the packaging and processing. These systems do make it much more efficient however, thousands of people could enjoy a job at Wal-Mart if they took the place of these machines. 

While speaking of the most grandiose businesses it would only be appropriate to mention Google.  The other day I was speaking with a fellow classmate whose wife’s job is to program search engines (SEO-search engine operator). Businesses come to her, and pay her x amount of dollars for programming the systems so when a search is made their business’s website will be the first to pop up on the screen.  If you were to think about the way you navigate Google, you, along with millions of others, would probably realize that because we are so used to getting just what we want within a few moments at our fingertips we will click one of the first 3 or 4 links dealing with our search. Businesses who are willing to pay more money have a greater chance of being the top search result, meaning their site will be visited.  Because of these search engines individuals can link with big companies and big companies can link with other big companies.  It has truly flattened the world. A thought can turn into reality because of Google’s ability to link us all together.

Software & Outsourcing

Friedman describes workflow software using many examples…and words.  However, to simply understand it: it allows companies to operate more efficiently through way of the Internet.  For example, Jill, owner of an expanding bakery, was trying to discover a way in which she could link all of her sales to one software database, and to allow her stores around the state to clearly communicate their daily sales and other pertinent information.  Once she found helpful software that could allow more ‘workflow’, she not only could do these things, but also send out emails to hundreds of customers and have access to other helpful tools to run her business.  This is just a simple example of what is being done today all over the world.  Workflow software was once a standard model that was easy and accessible to many around the globe.  However, today it has become a business, a competition to say the least.  Millions of dollars are dumped into the business of creating specified software for multi-million dollar companies. 

Another fascinating type of software is open-source.  What a clever way to share ideas and develop the Internet!  People from all over the world have access to the software and each can poke and prod at it until it becomes something big, perfect, and universal.  Just like a puzzle sitting on a table in a home where children, parents, friends… anyone can go to contribute on their own time, in their own way.  And, as pieces are added, some may be crammed into the wrong spot.  Perhaps Cindy is the culprit of misplacing a piece, but there is always Mary Mom to come along and replace it-edit per se.  Open-source software operates in this same way.  It can be proofed and reproofed until the software becomes perfect. 

It takes many people to generate something as genius as the Internet, and it takes even more people to keep it up and running.  However, the Internet is not the only machine that needs help from multiple sources.  Any business that is seeking to expand knows that outsourcing is the only way to upsize and generate money.  Outsourcing is the method to which product is distributed around the globe, or even locally, to accomplish a job efficiently (both time and cost).  Early in the book, Friedman told of an experience he had in India.  Accountants in the United States ship(ped) their work to India, have the work done by accountants there, and then have it returned.  In the meantime US accountants would deal more directly with customers and their personal needs.  

On a personal note; my father, a business owner, often receives parts from machining companies.  With his lasers, he places a mark on the parts and then ships them directly back to the machining company.  This is an example of outsourcing.  Granted, the machining company (or the accountant in the example above) could do the labor themselves, however it would take more time, spend more money, and let’s face it-the job would not be completed nearly as professionally.  Because of globalization, jobs requiring shipping and returning (which seem like a lot of work) are truly more beneficial for all parties involved.  Especially when other factors are considered such as time zones.  If a job, such as an X-Ray, is needed by the next day in Atlanta it can be shipped to Australia, studied, and have a diagnosis presented by the next morning in the US. 

The Internet has simplified businesses and their overall logistics. It has also paved the way for the work field to generate more money, in less time, involving more people.

UNIT 1

‘Forces That Flattened The World’

In order to distinguish between Globalization 1.0, 2.0, and 3.0- according to Friedman, it would be helpful to take a step back and analogize it.  Although Friedman is talking about technology and the course it has taken to get to from Globalization 1.0 to Globalization 3.0 we can liken it to a theme park.  Let’s say an amusement park was built a mere three blocks away from your home.  You, your family, and friends who also lived nearby would most likely attend the theme park quite often while those who lived in a neighboring state or even the next town over would attend very few times, if at all.  It’s all based on location and convenience.  This can be compared to Globalization 1.0.  Technology was only available to the country as a whole. To put it simply, the idea of the Internet was only known by a gradually growing group of individuals.

Globalization 2.0 expands further outward.  To continue with our amusement park analogy:  Let’s say the opening of the theme park near your home was a huge success, so much so that they decide to build one in every state in America.  The experience of riding a thrilling rollercoaster is becoming more available, just as the experience of being connected to the far reaches of the world became more available to companies rather than just the massive government. 

Finally, every individual in the country has access to an amusement park due to more and more popping up and advances in transportation.  Not only are there more, but the cost to participate is less.  This is exactly what happened in Globalization 3.0.  Suddenly that which was a far distant idea and only available to large companies could be brought into a single home and sit on the office desk.  

Friedman continues by discussing the impact the Berlin Wall had not just on Berlin and the surrounding countries, but also on the world as a whole.  Before the fall of the Berlin Wall there was a physical and figurative separation.  Friedman says, “…the Berlin Wall was not only blocking our way; it was blocking our sight - our ability to think about the world as a single market, a single ecosystem, and a single community.”  We no longer had to be separated into ‘policies’, such as the ‘Western Policy’ or the ‘Eastern Policy’.  They could be made into a ‘global policy’ (Friedman 54).  Friedman celebrates the fall of the wall simply because of the way it swung open the door for the world to view, work together, and most importantly, learn from one another.

The second flattener that Friedman discusses is Netscape, or as he refers to it, 8/9 (the date Netscape went public in 1995).  Considering how influential this event is it is amazing how very few people know about it.  As Friedman puts it, “It helped make the Internet truly interoperable.” (Friedman 66)  Netscape, as it was further developed, allowed scientists to communicate with one another no matter what system they were on.  It is also important to recognize the impact competition had on the development of Netscape, Microsoft, Windows, etc. Because these companies were getting started around the same time they pushed one another. They eventually joined together and allowed users to enjoy the options within the internet, rather than fester over how to first get on the Internet.  Netscape allowed people from all over the world to communicate.  That is its significance.  We, as humans are ‘programmed’ to want to communicate and be in the know.  Because of the genius invention of Netscape this was all made possible.