Great video, this is how I teach it to my supply chain students: Students: There is a claim that every organization needs to focus all of its scarce, limited, and valuable resources (manpower, machines, money, management, and material - the 5Ms) on being the best at one specific thing (your core competency). The idea is that if you try to be a huge diversified conglomerate that tries to be the best at everything, then you will eventually suck at everything because you will have to spread your resources out too thinly across too many areas. General Motors used to be a diversified industrial conglomerate that made train engines, airplane engine, cars, trucks, ovens, refrigerators, generators, etc. How about just focus on cars and trucks? If you do something better, faster, and cheaper than anyone else in the world (your core competency), then wouldn't everyone come to you for it? Why wouldn't you outsource to someone that can do it better, faster, and cheaper than you? But, isn’t developing a core competency putting all of your eggs in one basket? Answer - no. Look at 3M. What is 3M’s core competency? Answer - Adhesives/glues/sticky stuff. They make the best sticky stuff in the world. What customers, products, and/or industries use sticky stuff? All of them do. 3M has a core competency and is actually diversified and recessionary proof because of it. Every company in every industry for every product needs glue. How about another example like Honda. What is Honda’s core competency? Answer - Powertrain (engines and transmissions that last forever). So what products use Honda powertrain? Answer - anything and everything that needs a powertrain - leaf blowers, snowmobiles, jet skies, 3 and four wheeler, cars, trucks, generators, motorcycles, chainsaws, etc. That is diversified and recessionary proof by definition. Companies right now are outsourcing entire functional areas to other companies that have core competencies in these functional areas. For example, companies are outsourcing logistics/transportation/distribution management to 3PLs and 4PLS because these 3PLs and 4PLS can do it better, faster, and cheaper (it is their core competency). Are companies outsourcing purchasing/procurement/sourcing? Yes - to BPOs (Business Process Outsourcing firms), especially for indirect (e.g., MRO, printers, toilet paper, travel, advertising, etc.) and perhaps even direct one day. Are companies outsourcing manufacturing/product/operations? Yes - to manufacturing subcontractors like Jabil Circuit. Jabil can build circuit boards for several different industries such as aerospace, automotive, computer hardware, etc. These companies that outsource to Jabil do not have the economies of scale that Jabil gets by doing it for everyone. Futhermore, in some industries like high tech (Texas Instruments, Hewlitt Packard, Honeywell, Intel, Apple, etc.), their product life cycles are so short that they cannot afford to make the capital investment that Jabil can and does for circuit boards. Companies like Nike, Mattell Toys, Dell, etc., do not actually even build anything themselves and they outsource everything to manufacturing subcontractors (some of which might be sweatshops in South East Asia - but hopefully these shops are SA 8000, ISO 9000, and ISO 14000 certified which proves they take labor laws, quality, and the environment somewhat seriously). The cool thing about your majors is that lots of companies are outsourcing purchasing, operations, and logistics management. That means there are companies out there with core competencies in a component of your major. So, who are they going to give preferential treatment towards for hiring? Probably students like you that are majoring in their core competency. Think about it, wouldn't there be fewer jobs for you if companies did everything themselves and they did not outsource SCM functional areas like purchasing, operations, and logistics. You could make the argument that if they did this stuff themselves, they could still hire you, but they were not doing that in the 1970s and 1980s. They hired general business majors or just put people without college degrees into SCM jobs. That might explain why they started to kind of underperform in these areas. Couldn’t we say the same about healthcare today or in the very recent past? There were a lot of people in healthcare making supply chain and spend decisions that had no formal education or training in SCM. There are college students now majoring in the other specialized majors such as Sales, Food Marketing, HRM, etc. That is a great thing because that is a core competency for several companies in several industries and they hire those students. Final thought - But what about these manufacturing companies that are outsourcing everything, who will they hire? Probably you. I think SCM is a core competency for manufacturing firms that outsource everything. Think about it. They all outsource everything to the same suppliers. Who wins in that situation? The company that manages their suppliers the best - SCM. An aggressive outsourcing strategy that not only includes outsourcing your direct material needs, but also entire functional areas (like purchasing, operations, and logistics management) is very risky territory. It is territory that requires strong skills sets and a core competency in your major - supply chain management. -- Dr. Sime (Sheema) Curkovic, Ph.D., Valluzzo & Lee Honors College Faculty Fellow Professor, Operations/Supply Chain Management Western Michigan University, Haworth College of Business Schneider Hall Room 3246, Kalamazoo, MI 49008-5429 Tel.: 269.387.5413; E-Mail: sime.curkovic@wmich.edu "Better, faster, cheaper"; www.wmich.edu/supplychain "WMU Integrated Supply Management (ISM)...Nation's best undergraduate SCM program (Gartner 2014); 2nd in SCM technology (SoftwareAdvice 2015); 2nd in top global SCM talent (SCM World 2017) Vitae: www.wmich.edu/sites/default/files/curriculum-vitae/CurkovicVitae2017_0.pdf Sample Lectures & Should You Major in Supply Chain Management? wmich.edu/supplychain/academics/lectures
The effort you put in here to make us understand is impeccable. I was bit worried how would I make a presentation for my exam and then I found you which ease my problem. Thanks a ton . Keep going Btw you’re actually implementing this uniqueness in your videos.
Get Chapter-1 Strategic Management New Course Handwritten Notes here -
www.instamojo.com/shivajigurukul/ca-intermediate-new-course-strategic-managem/
Great video, this is how I teach it to my supply chain students:
Students:
There
is a claim that every organization needs to focus all of its scarce,
limited, and valuable resources (manpower, machines, money, management,
and material - the 5Ms) on being the best at one specific thing (your
core competency). The idea is that if you try to be a huge diversified
conglomerate that tries to be the best at everything, then you will
eventually suck at everything because you will have to spread your
resources out too thinly across too many areas. General Motors used to
be a diversified industrial conglomerate that made train engines,
airplane engine, cars, trucks, ovens, refrigerators, generators, etc.
How about just focus on cars and trucks?
If you do something
better, faster, and cheaper than anyone else in the world (your core
competency), then wouldn't everyone come to you for it? Why wouldn't
you outsource to someone that can do it better, faster, and cheaper than
you? But, isn’t developing a core competency putting all of your eggs
in one basket? Answer - no. Look at 3M. What is 3M’s core
competency? Answer - Adhesives/glues/sticky stuff. They make the best
sticky stuff in the world. What customers, products, and/or industries
use sticky stuff? All of them do. 3M has a core competency and is
actually diversified and recessionary proof because of it. Every
company in every industry for every product needs glue.
How about
another example like Honda. What is Honda’s core competency? Answer -
Powertrain (engines and transmissions that last forever). So what
products use Honda powertrain? Answer - anything and everything that
needs a powertrain - leaf blowers, snowmobiles, jet skies, 3 and four
wheeler, cars, trucks, generators, motorcycles, chainsaws, etc. That is
diversified and recessionary proof by definition.
Companies
right now are outsourcing entire functional areas to other companies
that have core competencies in these functional areas. For example,
companies are outsourcing logistics/transportation/distribution
management to 3PLs and 4PLS because these 3PLs and 4PLS can do it
better, faster, and cheaper (it is their core competency). Are
companies outsourcing purchasing/procurement/sourcing? Yes - to BPOs
(Business Process Outsourcing firms), especially for indirect (e.g.,
MRO, printers, toilet paper, travel, advertising, etc.) and perhaps even
direct one day. Are companies outsourcing
manufacturing/product/operations? Yes - to manufacturing subcontractors
like Jabil Circuit. Jabil can build circuit boards for several different
industries such as aerospace, automotive, computer hardware, etc.
These companies that outsource to Jabil do not have the economies of
scale that Jabil gets by doing it for everyone. Futhermore, in some
industries like high tech (Texas Instruments, Hewlitt Packard,
Honeywell, Intel, Apple, etc.), their product life cycles are so short
that they cannot afford to make the capital investment that Jabil can
and does for circuit boards. Companies like Nike, Mattell Toys, Dell,
etc., do not actually even build anything themselves and they outsource
everything to manufacturing subcontractors (some of which might be
sweatshops in South East Asia - but hopefully these shops are SA 8000,
ISO 9000, and ISO 14000 certified which proves they take labor laws,
quality, and the environment somewhat seriously).
The cool thing
about your majors is that lots of companies are outsourcing purchasing,
operations, and logistics management. That means there are companies out
there with core competencies in a component of your major. So, who are
they going to give preferential treatment towards for hiring? Probably
students like you that are majoring in their core competency. Think
about it, wouldn't there be fewer jobs for you if companies did
everything themselves and they did not outsource SCM functional areas
like purchasing, operations, and logistics. You could make the argument
that if they did this stuff themselves, they could still hire you, but
they were not doing that in the 1970s and 1980s. They hired general
business majors or just put people without college degrees into SCM
jobs. That might explain why they started to kind of underperform in
these areas. Couldn’t we say the same about healthcare today or in the
very recent past? There were a lot of people in healthcare making
supply chain and spend decisions that had no formal education or
training in SCM. There are college students now majoring in the other
specialized majors such as Sales, Food Marketing, HRM, etc. That is a
great thing because that is a core competency for several companies in
several industries and they hire those students.
Final thought -
But
what about these manufacturing companies that are outsourcing
everything, who will they hire? Probably you. I think SCM is a core
competency for manufacturing firms that outsource everything. Think
about it. They all outsource everything to the same suppliers. Who
wins in that situation? The company that manages their suppliers the
best - SCM. An aggressive outsourcing strategy that not only includes
outsourcing your direct material needs, but also entire functional areas
(like purchasing, operations, and logistics management) is very risky
territory. It is territory that requires strong skills sets and a core
competency in your major - supply chain management.
--
Dr. Sime (Sheema) Curkovic, Ph.D., Valluzzo & Lee Honors College Faculty Fellow
Professor, Operations/Supply Chain Management
Western Michigan University, Haworth College of Business
Schneider Hall Room 3246, Kalamazoo, MI 49008-5429
Tel.: 269.387.5413; E-Mail: sime.curkovic@wmich.edu
"Better, faster, cheaper"; www.wmich.edu/supplychain
"WMU Integrated Supply Management (ISM)...Nation's best undergraduate SCM
program (Gartner 2014); 2nd in SCM technology (SoftwareAdvice 2015);
2nd in top global SCM talent (SCM World 2017)
Vitae: www.wmich.edu/sites/default/files/curriculum-vitae/CurkovicVitae2017_0.pdf
Sample Lectures & Should You Major in Supply Chain Management?
wmich.edu/supplychain/academics/lectures
That's so great videos for an average studemt it is so useful
Best way to teach SM is yours .Thank you for this video❤❤❤
The effort you put in here to make us understand is impeccable.
I was bit worried how would I make a presentation for my exam and then I found you which ease my problem.
Thanks a ton . Keep going
Btw you’re actually implementing this uniqueness in your videos.
Hey! Thanks. You are so kind to say that.
honestlyy brooo, vdeoo mein buht efforts lgaaye and knowldge b dee aee liike or subcribe to bntaa aeee..
thanks bro
Love your teaching 💙 sir
thank you for making this easy to understand
Best best explanation ever🌸 new subscriber💕
Sir stop writing phle se likh ke rakho toh jada better h because vo acha hota h by the way thnxx for helping us
Thank a lot for understanding this topic 🙂☺️😃😊😌
awesome sir ...very easy to understand
keep uploading more videos
Thanks for appreciating. It means alot
It was really very helpful.
Thank you
Thanks for appreciating. It means alot
Wow......sir bahot easily samjhaya hai.
Thank you
Thanks for appreciating. It means alot
Here is your new subscriber
Thnx for explaining so well and so soft
thanks alot
Can you please tell me what is core competencies of esselworld theme park
Superb explanation sir.keep up.
Can I write this notes in University paper for strategic management
real impact on customer
make a video on hr scorecard
Nicely explained👍
Sir HUL marketing and sales mein kaise core competency karti hai...??
Thank u
Thanks for such gyan
Thanks
Sir I'm unable to access the notes please help me 🙏
Sir , you are a great ❤❤
sir yaha par firm ka kya mtlb hai ?
i mean jaha thak merko pata hhai firm ka mtlb "hard" hota hai,
can you please help me out here....
it means enterprise here
Good job!!
anushri agrawal thankyou
1 no. Explaination brother
thanks for appreciating
Sir marketing management k sare topic hi smjhadein mba second semester k liye plz
Thanks brother 🫂
Well explained👌
Are you chartered?
Very informative
Superb sir
Thanq Soo much♥️
Thank you sir
Thank you sir 😊
Thanks for appreciating. It means alot
Maine short form mey likha ... aap mat likhna :P
🤣
please send me the slids
Nice
thanks welcome service😎😎
Super brother
thanks
Good beta...
Thank you papa
thank you for this video
Thanks for appreciating. It means alot
Nice