People who outsource to reduce cost are making a big mistake, says James Tompkins, president and founder of Tompkins Associates. His latest book Logistics and Manufacturing Outsourcing: Harness Your Core Competencies suggests the real reason to outsource is to free time to concentrate on your core competencies.
More outsourcing arrangements fail than you might think – 25% in the first year and a whopping 60% in three years. One reason is that while outsourcing is intended to shift non-core competencies to someone else, the irony is, managing outsourcing is a non-core competency in most companies.
The worst person to outsource distribution, for instance, is the distribution guy, Tompkins points out. That’s because distribution is his core competency and outsourcing isn’t.
Tompkins and his co-authors Steven Simonson, Bruce Tompkins and Brian Upchurch, establish a grid with primary and secondary core competencies and primary and secondary non-core competencies. While the impact of the primary and secondary core competencies may be reasonably apparent, Tompkins points out primary non-core competencies may not be core functions, but they do affect the company. Secondary non-core competencies don’t affect the company, he continues.
Retain responsibility for secondary core competencies, says Tompkins, but give the execution to someone else. You must focus on core competencies, he reiterates. Failure to do so will cost you money.
Tompkins’ comments were part of a presentation at the Logistics Forum in May, which coincided with the release of the book. It is self-published by Tompkins Press. http://www.tompkinsinc.com.
A book published by the Council of Supply Chain Management Professionals (CSCMP) provides guidance to logistics and supply chain management professionals in gaining visibility from their CEOs.
Written by Drs. Karl B. Manrodt and Stephen Rutner of Georgia Southern University and Dr. Brian Gibson at Auburn University, Communicating the Value of Supply Chain Management to Your CEO serves as a tool to help C-level executives about the importance of logistics and supply chain management in overall operations and in achieving overall company success.
As CSCMP notes, CEOs, CFOs and COOs are beginning to realize that visibility in the supply chain is a critical component to achieving world-class excellence. The findings of this book indicate that upper-level management has begun the journey towards a greater understanding of supply chain management.
There is a cost for this soft cover book. More information and copies may be orders at CSCMP’s online bookstore at http://www.cscmp.org/.
Looking for a little lighter fare? Bought2 Horses and a Wagon weaves the history of turn-of-the-century Minnesota together with the family and corporate history of Murphy Companies, a fourth-generation warehousing and trucking company.Published by the Ramsey County Historical Society in time for the 100th anniversary of the Murphy Companies in late 2004, the book is full of period photos that reflect the development of the city of St. Paul as well as the Murphy Companies. The book follows the family, the company, and to a degree, the fledgling logistics industry through the evolution of regulation and on into deregulation of the transportation industry as well as the impact of two world wars, the Great Depression and all of the significant economic, social and political events of the 20th Century. www.rchs.com/books.htm.