Outsourcing

Whether their members are outsourced, independent contractors or employees allowed to work from home, distributed teams are . In fact, a Global Leadership Summit  found that 59 percent of companies surveyed planned to have more than half their teams working remotely by 2020.

Related: 

It’s not hard to see why: Distributed teams move faster to produce better results and are more self-motivated than their cubicle-tethered counterparts. Who wouldn’t be more motivated, after escaping a drab office filled with zombies to work at the beach, in a coffee cafe or at home? As the CEO of an entirely remote company, I know I certainly am.

Tech startups like Slack, GitHub and JPay all rely on distributed teams to develop the infrastructures of what are now widely known platforms. Are you on the bandwagon?

What sets distributed teams apart?

A distributed team helps you stay competitive by providing the following benefits:

• Greater speed to market. A  found that 42 percent of participants couldn’t determine a market need for their products. Consequently, if you’re an entrepreneur taking too long to release a solution, your competitors can steal market share.

Outsourcing product development saves time and money in that it’s not necessary to hire, train and onboard employees. Teams already exist with processes in place that can get a product ready to go to market much more quickly, which often leads to a greater ROI, providing financial benefits on both ends of the development spectrum.

• Remote authorship capabilities. Time is finite; entrepreneurs can address only so many issues at once. When you become reactionary from constantly dealing with problems, instead of proactively driving the organization, your company’s momentum can die — possibly along with the  itself.

Remote authorship tools allow remote teams to communicate, regardless of where everyone is. With a distributed team already accessing things remotely, you can do the same, eliminating friction and allowing projects to keep moving. You can provide feedback and respond to issues at your leisure via email and collaborative platforms, while your distributed team members make corrections on their own time.

• Latest trends and diverse approaches. Technology (especially web-based) is constantly changing, and having a remote team also allows you to pull in the latest design trends from around the world. For one of our clients in the Midwest, having a U.K.-based designer added edginess to the client’s web design that resulted in more user engagement.

A recent study found that  of HR professionals surveyed attributed greater creativity to flexible work. Different people in distinct locations leverage different technology in different ways to complete the same tasks. That’s what makes diversity key to competing in such a quickly evolving industry.

Related: 

Incorporating distributed teams

Actually integrating distributed teams into your business means rethinking how you operate. Try these tactics to ensure the process happens more smoothly:

• Insist on overcommunicating. Even if you use localized teams, it can be difficult to hold critical daily huddles to discuss project backgrounds, solicit feedback and set expectations. With distributed teams, though, much of this communication can (and should) be accomplished in writing to ensure that the ball isn’t being dropped as you increase transparency.

For Buffer, an almost entirely remote company, success hinged largely on the  with its distributed teams. So it made clear communication — free of assumptions and cleverness — one of its core values to make sure everyone sees the same big picture from any angle.

• Show your face. Not everything has to be done in writing. Just seeing your smiling face can go a long way in building morale and confidence in leadership among your distributed team members. A recent study found that 87 percent of  said they felt more connected to their colleagues. That finding reflects how video helps remote workers feel more like part of a team.

Video-conferencing tools, in fact, have become ubiquitous, and this instant, face-to-face method of communicating is excellent for getting quick reactions or resolving small issues. More complex issues should still be communicated in writing for easier reference and searchability, though.

Of course, scope creep can make differentiating between “small” and “big” issues a challenge. As projects move through the completion cycle, features are often added that may seem like small tweaks but can delay project completion. So, while that initial change may be small, how it affects the project as a whole could amplify it into a larger issue that should be handled in writing, to be safe.

• Reduce intimidation. When key stakeholders work remotely, they’re much less likely to be intimidated about speaking up and commenting on aspects of the project. Accenture recently found that 31 percent of employees it queried were unhappy because of a perceived .

Remote team members are not visible to one another — at least not physically — and anybody who’s ever read the comments section of a blog post or YouTube video knows how that feeling of safety and anonymity behind a screen boosts courage. Collaboration tools like Slack and InVision decrease intimidation by providing a simple platform for all project stakeholders to contribute to the feedback loop.

Studies have shown that  to make decisions and provide feedback are more likely to engage in critical thinking, making them more creative and productive. And this only enhances product development.

Keeping your team at a healthy distance

Product development is an integral part of any business’ success, and you might be tempted to hire a local, in-house development team that can be micromanaged, to ensure your products will be both innovative and in-demand.

As I’ve tried to convey, however, that mindset couldn’t be further from reality. Distributed teams provide a slew of advantages over localized teams. Remote workers are consistently cheaper, faster and more creative than on-site teams, which is why more and more companies utilize them.

Related: 

If you want to survive the next evolution of the tech industry, you’d be wise to join them.

What is supply chain management?

According to the Council of Supply Chain Management Professionals (CSCMP) “Supply chain management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management”.

Introduction

Having achieved significant improvements in manufacturing, many firms are now focusing their attention on their supply chains. With increased globalization, supply chains for most products have become longer both on the input as well as the output sides.

This, combined with the trend towards proliferation of products makes management of the supply chain a very challenging task. SO in order to produce quality products with less cost & supplying it at less time many innovations & development has been made in the management of manufacturing supply chains. In the management of product flows, the innovations include concepts such as modularisation, postponement, mass customisation and flexible automation, time-based logistics, and cross docking.

In the management of information flows, the innovations include the use of information technologies and strategic partnerships to improve the transparency of information. There are some W&H questions that will prove that innovations are relevant to SCM. Today Companies cannot grow through cost reduction and reengineering alone. Innovation is the key element in providing aggressive top-line growth, and for increasing bottom-line results.

What are the changes required?

Changes in thinking, products, processes, or services are required in SCM. The goal is positive change, to make something better or improve efficiency, productivity, quality, competitive positioning, market share, etc.

How the change can be achieved?

The most successful innovation occurs at the boundaries of organizations and industries where the problems and needs of users, and the potential of technologies can be linked together in a creative process. Now take a tour of developments in supply chain:

• Creation Era – This era of supply chain management include the need for large scale changes, reengineering, and downsizing driven by cost reduction programs.
• Integration Era – The development of Electronic Data Interchange (EDI) systems in the 1960s & introduction of Enterprise Resource Planning (ERP) systems.
• Globalization Era – Characterized by the attention towards global systems of supplier relations and the expansion of supply chain over national boundaries and into other continents
• Specialization Era – Phase One – In the 1990s industries began to sold off non-core operations & Outsourced Manufacturing and Distribution.
• Specialization Era – Phase Two – Supply Chain Management as a Service & Outsourced technology hosting for supply chain solutions.

Supply Chain Management 2. 0

SCM 2. 0 results the combination of the processes, methodologies, tools and delivery options to guide companies to their results quickly. Innovation, Recent trends and changes in supply chain management: In the last one decade supply chain management has changed rapidly.

There has been lot of involvement of new ideas. Few of them are described below:

Shifting focus from manufacturing to outsourcing: 25 years ago, most manufacturers owned their own factories and controlled their own production. They had complete, detailed knowledge of the capacity, schedules, and costs of manufacturing. Companies could adapt quickly to changes in the marketplace and restore the supply/demand balance more easily.

With complete visibility into their own factories and sales offices, companies could easily find the status of inventory, work in progress, and customer orders currently in the supply chain. In the years since, a fundamental shift has taken place. More and more design, marketing, and sales take place on home shores, while parts manufacturing and final assembly are outsourced to offshore suppliers. In fact, a 2006 AMR Research study of contract manufacturing trends found that 92% of companies outsourced some of their production with 40% projecting they will outsource more in the next two years.

Emergence and proliferation of Information Technology

Information technology, even taken as an independent environmental factor and its adoption in professionally run businesses and firms has led to fundamental changes in supply chain behavior and further to the changes in governance structures. Virtually all sectors of industry in the developed and in the developing regions have witnessed the following major trends over the past two decades:

• Data storage costs have gone down in the past few years, while the volume of data gathered for business analysis purposes has increased dramatically. The cost per business transaction as well as the networking and communication costs within supply chains has been greatly reduced. Simultaneously, the capabilities and the content involved in the communications and the number and relevance of IT enabled business transactions have also increased.
• With greater analytical capabilities and design technologies, new product introductions have increased, in part as a response to the need for greater product variety. As a consequence, product life-cycles have been shrinking, as documented for many industry sectors.

The role of IT in the handling and communication of product design information is also well chronicled. These changes in IT (in particular business communication technologies) have played a critical role in enabling firms and supply chains to operate on a global scale. Without IT being the enabler, the disintegrated supply network cannot be managed effectively.

In the 1990s industries began to focus on “core competencies” and adopted a specialization model. Companies sold off non-core operations, and outsourced those functions to other companies.

The specialization model creates manufacturing and distribution networks composed of multiple, individual supply chains specific to products, suppliers, and customers, who work together to design, manufacture, distribute, market, sell, and service a product.

Emergence of Retail Powerhouses

The consolidation or convergence of retail channels, as in the case of the retail chains such as Wal-Mart and the accompanying phenomena of smaller stores and chains being replaced by larger discount stores, not only have ad a profound impact on the supply channels, it has also changed the traditional roles defined for the manufactures, the retailers, the wholesalers and distributors. With the emergence of retail powerhouses, the large manufacturers of consumer items have seen incentives to outsource the cost and asset intensive operations to contract manufacturers, while focusing on creating and sustaining brand values through design and marketing activities. For retailers, the competition is now based on cost, logistics, and speed of innovation.

These basic tenets of retail competition coupled with the change in the retail landscape have an enormous impact on the supply channels that feed the growing retail channels. These supply channels, both large and small, have to respond quicker and more efficiently to customer demand patterns. As a result, retail companies have attempted to change their business models and to dictate broad strategic and operating requirements to their vast supply base – thus there is pressure even on large and established suppliers to conform to the specific practices and the needs of the retail channels.

In order to compete in the new landscape, retailers are taking on influential role in the design of products, they are also ready to reach in the second tier to develop market and distribute products that in some cases compete directly with their own suppliers. In short we can define latest trends in SCM as:

• Demand plan sets the tone: Critical to the success of any Demand Plan is having all stakeholders, including sales, marketing, finance, product development and supply chain agrees upon a consensus Demand Plan. It is important for all participants to discuss factors affecting customer demand patterns, such as new or deleted products, competitors or market conditions, the aggregate demand plans and associated revenue plans. Once all demand for products and services is recognized, the information is consolidated into one Demand Plan. We have found that companies with dedicated resources focused around demand planning and forecasting yield stronger results and  drive more value to their company. Organizations that focus part time on demand planning and forecasting efforts yield substandard results.
• Globalization: The right Supply Chain Design is critical to managing the changes brought about by rapid globalization. A well thought-out Supply Chain Network Design can optimize the network and the flow of materials through the network. In doing so, network design captures the costs of the supply chain with a “total landed cost” perspective, and applies advanced mathematical technology to determine optimal answers to both strategic and tactical questions.
• Sales and operations planning
• Transportation/distribution management
• Improved product lifecycle management
• Improved strategic sourcing and procurement

Suppliers can differentiate themselves in a number of ways as well as provide value, additional services and capabilities to their customers. The differentiating factors include:

• Vendor Managed Inventory (VMI)
• RFID
• Labeling and packaging
• Dropshipping
• Collaboration

Establishment of control mechanisms to proactively monitor the various components of the supply chain and, Information systems to connect and coordinate the supply chain as seamlessly as possible. A failure to excel at any one of these components can result in breakdowns affecting the entire supply chain.

As the economy becomes more global, labeling and compliance to packaging requirements and regulations have become critical to success. Without adherence to local packaging and labeling regulations a product may violate local requirements, preventing it from being distributed and sold in that market.

Product lifecycle management technology and processes can help ensure that products being produced and targeted for specific markets are well-managed and are compliant.

Recent examples of collaboration have emerged in the expansion of Sales and Operations Planning (S&OP) processes that include upstream and downstream value chain partners as regular participants. S&OP processes help maintain a well-coordinated and valid, current operating plan in support of customer demand, a business plan and a strategy.

The improved resulting operating plan provides the management of each partner with a complete picture of forecasted demand, supply capacity, corresponding financial information with financial implications and allows them to make informed, critical decisions. We have visited some companies to show the Innovations and Development they have applied in their SCM for the last 10 years.

Company Profile

DTDC Courier & Cargo Ltd. (DTDC) was incorporated in the year 1990. Within a p of 20 years, through its business associates DTDC expanded its delivery network across the length & breadth of the country, thereby creating the nation’s Largest Domestic Delivery Network. Today DTDC is the second largest Indian company in the Express industry. DTDC can also be credited with pioneering the franchisee concept for the courier industry in India, and today has the largest franchisee network.

Headquartered at Bangalore, with 4 of its Zonal Offices at Delhi, Kolkata, Chennai & Mumbai, DTDC currently serves around 10, 000 pincode areas and has over 3700 franchised outlets supported by 176 offices which includes its Regional Offices, Area Offices, Branch Offices, Operational Hubs and Sub-Branches. DTDC has extended its service network to the overseas market and provides services to worldwide destinations using its own branches and international associates at prime gateways like USA, UK, Singapore, UAE, Nepal, Bhutan, Bangladesh, SriLanka & Hong Kong.

Thanks to its strong IT infrastructure, the company is able to deliver 10. 5 million parcels a month to customers across the world. To support its ambitious growth plans; DTDC has entered into an association with Reliance ADAG Group, and has on its Board, a Director from Reliance. Innovations and development they have taken in SCM for last 10 years.

V Express for Business Delivery: DTDC has lunched of V express, its new product which assures delivery of documents on the next business day. The product carries a unique feature of 100% money back if at all there is any service failure.

The service shall be available in the 6 metros of Mumbai, Delhi, Bangalore, Chennai, Kolkata and Hyderabad in select princode areas. There will also be SMS Alert on delivery as avalue added service.

SMS Courier Limited for Speedy Delivery of Intra-City Consignments: DTDC has launched SMS Courier Ltd., its subsidiary for the purpose of speedy intra-city deliveries and mass mailing activities. SMS Courier will be useful to organizations dealing in large volumes of intra-city consignments like the banks, financial institutions, insurance companies and cellular operators.

The newly-formed subsidiary will ensure timely deliveries even to the remotest areas of the city. This service is available in the six metros and has made its entry into Pune as well.

Tie-Up with Reliance Money For Distribution Of Financial Services

To support their ambitious growth plans DTDC India’s leading Air Express & Cargo Company and Reliance Money Limited entered into a strategic alliance wherein DTDC will be acting as a distributor for Reliance Money’s financial products and services. DTDC already has a tie up with Reliance Capital and they would be happy to be associated with Reliance Money also.

With DTDC’s distribution network, Reliance Money will be able to reach out to the smallest of investors in the remotest parts of India thereby achieving its objective of providing safe and secure financial services at a retail investor’s doorstep.

DTDC uses IT as its virtual vehicle: But what made the courier delivery system so efficient? IT (information technology) of course. The operations, efficiency and customer satisfaction were all enhanced with the application of IT and this is the secret behind the success of DTDC.

The company uses IT as its virtual vehicle to provide timely and accurate information on the movement and delivery status of consignments. This is accessible through various digital modes like the DTDC website, mobile telephony (SMS) or its in-house developed track and trace facility. IT is the backbone of the entire operational and customer service process and e-mail is the lifeline of the company’s communications system.

By 1988, DHL was already present in 170 countries and had 16,000 employees. At the beginning of 2002, Deutsche Post World Net became the major shareholder in DHL. By the end of 2002, DHL was 100% owned by Deutsche Post World Net. In 2003, Deutsche Post World Net consolidated all of its express and logistics activities into one single brand, DHL. The world’s largest express and logistics Network DHL is the global market leader in international express, overland transport and air freight. It is also the world’s number 1 in ocean freight and contract logistics.

Supply Chain Management services are delivered across industry sectors and provide expertise, knowledge and resources in terms of personnel and supply chain tools. All services are targeted at optimizing logistical operations in both process and strategy, and are aligned to the client’s commercial expectations The services are as follows:

• Strategic Logistics Consulting
• Lead Logistics Provider
• Consulting and providing
• Transport optimization
• Route-Pro and Trans-Pro
• Consulting and providing Supply Chain Design
• Consulting and providing Transportation
• Engineering, optimization and re-engineering Implementation and Project Management
• Process Management
• Outsourcing DHL’s consulting services also offer re-organization of customer facilities, project management for customers, implementation of new IT Systems, creation of tender documents and tender processing.

Supply Chain Re-engineering

DHL works with customers to review supply chain efficiencies. One of the main tasks is to evaluate cost efficiency to ensure that costs are being driven down throughout the contract duration. Data analysis allows DHL to provide customers with ‘what if modeling’ or the impact of changing the business rules. Distribution to Stores Management DHL’s distributions to store solutions are focused on helping retailers create efficient and flexible supply chains to deliver product to retail outlets at high levels of service. These solutions are built from several core services including reverse logistics:

• logistics network strategy
• warehouse design and simulation
• Transport modeling.
• After Sales Optimisation Optimising return logistics and spare parts logistics as well as maintenance and repair services.
• Vehicle Management Services

Our vehicle management services focus on the management of sales and marketing support programmes for automotive manufacturers. Combining a range of services and systems to deliver a global response, we help you overcome challenges at the end of the automotive supply chain.

Samtel Color Group Company Profile

Samtel Group’s journey began in 1973, with a vision to create a world-class organization. Today, Samtel Group is India’s largest integrated manufacturer of a wide range of displays for television, avionics, industrial, medical and professional applications, TV glass, components for displays, machinery and engineering services.

The group employs 6000 people in nine world-class factories and has an annual turnover of Rs 12 billion (USD 300M) Samtel Group has strong design and development skills and is a dependable player with excellent technological capabilities and a long-term commitment to the display industry. Its products are known for ruggedness and reliability and conform to the latest relevant quality standards. The group has excellent relationships with suppliers of key components and the ability to design new products as well as set up hi-tech manufacturing facilities.

BHEL was founded in 1950s. Its operations are organised around three business sectors: Power, Industry – including Transmission, Transportation, and Telecommunication & Renewable Energy – and Overseas Business. Today, BHEL has a wide-spread network comprising 14 manufacturing divisions, 8 service centers, 4 power sector regional centers, 18 regional offices, and a large number of project sites spread all over India and abroad. BHEL is one of the largest exporters of engineering products & services from India.

BHEL has established its references in around 60 countries of the world, ranging from the United States in the West to New Zealand in the Far East. Its export range include: individual products to complete power stations, turnkey contracts for power plants, EPC contracts, HV/EHV Sub-stations, O services for familiar technologies, specialized after-market services like Residual Life Assessment (RLA) studies and retrofitting, refurbishing & overhauling, and supplies to manufacturers & EPC contractors.

BHEL’s product range include: Steam turbines and generators of up to 500MW capacity for utility and combined-cycle applications; Steam turbines for CPP applications; Gas turbines of up to 260MW (ISO) rating; Custom-built conventional hydro turbines of Kaplan, Francis and Pelton types with matching generators, pump turbines with matching motor-generators; Spherical, butterfly and rotary valves and auxiliaries for hydro station; HSD, LDO, FO, LSHS, natural-gas/biogas based diesel power plant; Industrial turbo-sets of ratings from 1. to 120MW; Steam generators for utilities, ranging from 30 to 500MW capacity, using coal, lignite, oil, natural gas or a combination of these fuels; Pulverized fuel fired boilers; Stoker boilers; Atmospheric fluidized bed combustion boilers; Circulating fluidized bed combustion boilers; Waste heat recovery boiler; Boiler Auxiliaries; Heat Exchangers & Pressure Vessels; Pumps; Power Station Control Equipment; Switchgears; Bus Ducts; Transformers; Insulators; Capacitors; Energy Meters etc.

Classification of Materials

The materials for procurement can be classified in two categories: Direct Materials: Materials, which go directly into the Project/ Product/ Site/ Systems. Indirect Materials: Materials other than above, such as consumables/ packing etc which are used in manufacture of despatchable products and materials such as coal, cement, kerosene, oil etc which are used to run the essential services/ machine tools/ office establishment. Supplier registration is one of the primary and important activities of MM functions. This is the entry point of supplier in BHEL.

A carefully chosen supplier will be an asset to the organizationABC analysis and EOQ methods. JIT does not work for BHEL as most of the procured items are long cycle items and Inventories have to be maintained to avoid any production hold ups. Normally inventories sufficient for 3 month requirements are maintained.

How orders are placed?

BHEL quotes against the tender requirements (normally global) published in all the national newspapers and also made available on the web sites of respective customers.

After evaluation of all the received bids by the customer, if the BHEL’s bid is found to be technically acceptable and financially the lowest then the customer places a Work order on BHEL.

Supply Chain Management For BHEL, Company Profile

Blue Dart Express Ltd. , India’s premier integrated air express carrier and logistics-services provider, has been one of the largest Global Service Participants of Federal Express Corporation, the world’s eading air express transportation company, since 1984. From 1984, Blue Dart represented all FedEx interests, under a principal to principal arrangement, in India. Blue Dart-Federal Express Relationship: Blue Dart and FedEx have determined a new agreement in October 1997 to coincide with the introduction by FedEx of its first round-the-world flight touching Mumbai, as well as its direct entry into the country. Under this agreement, Blue Dart is the exclusive provider of transportation, pickup and delivery, customs and related services for FedEx’s International Priority shipments, as well as the sole preferred consolidator of FedEx services. The Alliance seeks to leverage the strengths of both organisations for mutual benefit. While FedEx focuses solely on the development of its international business, with its link to the vibrant economy of the Sub-Continent, Blue Dart continues to consolidate its dominant domestic position, and service and enhance its international customer base as a licensee of FedEx, to support FedEx’s international growth.

The new agreement is designed to stimulate the development of India’s international express market by combining the competitive advantages of FedEx’s global reach with Blue Dart’s domestic coverage to increase the market share of both companies. Innovations and development they have taken in SCM for last 10 years: TrackDartTM: You can track the status of shipment by using the TrackDartTM box, which is available on the upper left panel of every page on our website. You may track shipments sent on Blue Dart services within India or to Nepal, Bangladesh or Bhutan.

You may also track international shipments sent on Federal Express to/from India. Shipments under single or multiple waybills may be tracked using either the waybill number or the reference number given at the time of shipping. MailDartTM: You may either use the Waybill Number or the Reference Number to track the status of your shipments. This feature helps you to track Single or Multiple shipments. To track the status of your shipments by Waybill Number enter the waybill numbers either in `Subject’ or in the text of the mail, each Waybill number seperated by a comma.

To track the status of your shipments by Reference/Order Number. Enter the reference/order numbers in `Subject’ of the mail, each reference or order number seperated by a comma. Find the service locations of Blue Dart and the Blue Dart counter or franchisee located closest to you. You may search by city, street name or pin code to find one of over 11,558 locations serviced in India, or in 211 countries worldwide.

You can check the transit times for your domestic and international shipments, and for the various services offered by Blue Dart to help you identify the service that meets your requirements. You can calculate your shipping costs for your domestic and international shipments by using their Price Finder. The Online Waybill generation tool helps the credit customer to generate a waybill for a consignment. The user has to enter the details of the consignment and the waybill will be generated in a PDF format.

Address Book

This feature comes with the online waybill generation module. The Address Book can be accessed by all credit customers of Blue Dart. You can create a new address list and modify or delete the addresses at any point of time. Nikon Focuses on Supply Chain Innovation— And Makes New Product Distribution a Snap Top consumer goods manufacturers now recognize that success requires more than just making market-leading products.

Having the right distribution network is just as critical. Nikon Inc. is the world’s leader in precision optics, 35mm and digital imaging technology. So it’s no surprise that when the company saw the next big trend in photographic technology—digital cameras—they were ready to deliver with some of the most advanced product designs in the marketplace. But to ensure that retailers could meet the demand of tech-hungry consumers and professional photographers, Nikon, with the help of UPS Supply Chain Solutions, reengineered its distribution network to keep them well supplied.

Client Challenge

To support the launch of its new digital cameras, Nikon knew that customer service capabilities needed to be completely up to speed from the start and that distributors and retailers would require up-to-the-minute information about product availability. While the company had previously handled new product distribution in-house, this time Nikon realized that burdening its existing infrastructure with a new, demanding, high-profile product line could impact customer service performance adversely. In our business, it’s not enough just to produce leading-edge products,” said Arnold Kamen, Nikon’s Vice President of Operations and Customer Service. “Having the ability—and visibility—to predict how much merchandise is  available and when it can be distributed makes the difference in staying ahead of customers’ needs. ” For Nikon, that meant applying its well-known talent for innovation to creating an entirely new distribution strategy and taking the rare step of outsourcing distribution of an entire consumer electronics product line.

With UPS Supply Chain Solutions on board, Nikon was able to quickly execute a synchronized supply chain strategy that moves product to retail stores throughout the United States, Latin America and the Caribbean, and allows Nikon to stay focused on the business of developing and marketing precision optics. Our Solution: Starting at Nikon’s manufacturing centers in Korea, Japan and Indonesia, UPS Supply Chain Solutions manages air and ocean freight and related customs brokerage.

Nikon’s freight is directed to Louisville, Kentucky, which not only serves as the all-points connection for UPS’s global operations, but also is home to the UPS Supply Chain Solutions Logistics Center main campus. Here, merchandise can either be “kitted” with accessories such as batteries and chargers, or repackaged to in-store display specifications. Finally, the packages are distributed to literally thousands of retailers across the U. S. , or shipped for export to Latin American or Caribbean retail outlets and distributors, using any of UPS’s worldwide transportation services to provide the final delivery. With the UPS Supply Chain Solutions system in place, the process calibrates the movement of goods and information by providing SKU-level visibility within complex distribution and IT systems. UPS also provides Nikon advance shipment notifications throughout the U. S. , Caribbean and Latin American markets. The result: a “snap shot” of the supply chain that rivals the performance of a Nikon camera. Nikon has already seen the results of its innovation in both digital technology and product distribution. The consumer digital camera sector is one of Nikon’s fastest growing product lines.

In addition, supply chain performance and customer service are measurably improved. Products leaving Nikon manufacturing facilities in Asia can now be on a retailer’s shelf in as few as two days. While products are en route, Nikon also has the ability to keep retailers informed of delivery times and to adjust them as needed, so that no retailer needs to miss sales opportunities due to lack of product availability. UPS Supply Chain Solutions is forging a broad spectrum of creative solutions to support the Nikon supply chain, including logistics, transportation, freight and customs brokerage services.

Synchronizing those pieces to work together gives Nikon a significant advantage in leveraging the competitive strengths of UPS Supply Chain Solutions. “Through a combination of UPS services, we have been able to greatly shorten our supply chain,” Kamen said. “Although we are achieving greater speeds, we have better visibility of our products, which enables us to provide a higher level of service to retailers and ultimately, the final customer. ” Once again, Nikon leads the market in leveraging the latest developments in technology.

Bob Reilly, head of Kaizen, just called you to say that he was impressed with your progress thus far in familiarizing yourself with operations at VMH-both the strategic details pertaining to its mission, competitive priorities, etc. and the specific details concerning its products and processes. He tells you that, with all the buzz about supply chain management (SCM) that you hear these days, VMH is actively interested in exploring how different SCM concepts and techniques could be used in their operations. Maintaining an adequate, assured supply of a variety of laboratory equipment, surgical instruments, and supplies, is critical to VMH. Meg Willoughby, head of Materials Management at VMH has a couple of specific assignments that you will work on later. But for now, Meg would like a concise research report for the top management team addressing SCM issues relevant to VMH.

“”Lee Jordan liked your write-up on the VMH service package and delivery system. Meg Willoughby wants you to prepare a similar report addressing SCM issues relevant to VMH. Senior Administrators at VMH are actively interested in exploring how SCM concepts and techniques could be adopted in their operations. Prepare a concise report addressing the specific questions that Meg has put together for you to address. I look forward to receiving your report, which I am sure will provide insight for SCM applications at VMH.”

1. Describe the essential concepts of SCM and explain to what extent SCM is applicable to a service operation such as VMH.
2. Describe internet-based electronic data interchange (EDI) and explain how VMH could benefit using EDI.
3. Describe how partnering with some of its suppliers could benefit VMH. What issues should VMH consider when developing partnerships?
4. Consider the different activities or services in VMH’s supply chain. Describe which activities might be better outsourced than done internally by VMH. Describe the key issues to consider before outsourcing a service or activity.
5. Purchasing, a major function in SCM, is especially critical in a health care industry service. Given your fresh-from-school perspective, describe the potential conflicts of interest or ethical issues facing the purchasing function.

Supply chain management (SCM) involves all the operations necessary to ensure that the flow of goods and services through a company are as efficient as possible . This involves all the production stages  – raw materials, inventory of work-in-progress and finished products, and therefore it involves good management practices relating to  sourcing, procurement, conversion  and  logistics.  SCM involves good co-ordination and collaboration between a firm and its ‘channel partners’ to be efficient; channel partners include a firm’s primary and intermediary suppliers, third party service providers and even customers. In terms of microeconomics, SCM involves matching the supply and demand within companies and across the range of its stakeholders  in  a planned, optimized fashion. Although initially SCM applied mainly to the manufacturing industry, its current usage can be well extended to service operations, similar to that  carried out by VMH.

With the unprecedented numbers of baby boomers , the healthcare industry in particular has experienced a rapid expansion, forcing it  to rethink its operational strategy to maintain competitiveness. SCM is a key area for a healthcare supplier like the Valley Memorial Hospital (VMH) to address in order to practice good cost management as well as achieve operational smoothness and efficiency. Building good supply chain networks for VMH involves not only building relationships with its suppliers and outsourced service producers, but also maintaining a good relationship with its consumers around  Albuquerque to ensure continuing, ongoing business. Moreover, VMH provides for a wide range of medical services in  the area, both acute and non-acute, which makes its operations quite complex. Unless there is an integrated organization wide SCM policy in place, cost efficiency for VMH as a whole is difficult to implement. The nurses, doctors, paramedics and supporting staff  are all part of this supply chain, and their  handling of all the resources of VMH in a co-coordinated, cost-effective fashion is critical to a  successful SCM implementation.

Electronic data exchange (EDI) is a standard protocol for carrying out business transactions throughout different  companies and organizations through an application-to-application data communication system.  This means an electronic network of computers between businesses, voluntary organizations, government entities and other groups. For example, EDI can be used to produce and emulate documents to automate purchasing, and EDI systems can make it possible for various departments, suppliers and agencies to create, transmit and receive EDI documents whenever any purchase occurs.  Despite the rapid growth of the internet, XML services and web technology, EDI remains the commonest method of e-commerce through out the world. Credit card payments, for instance, processed manually at shops and outlets involve the use of EDI which involve typically huge networks.

In the case of a complex organization like VMH, EDI could be put to good use in the supply chain management system in several ways. Firstly, EDI could save VMH a great deal of money in all its operations by replacing information flows that typically require manpower (scanning, archiving, typing) , materials  (e.g. paper, fax)  and  resources (meetings, seminars, phone calls). In healthcare systems, such savings could be enormous, as the work is typically both time and labor intensive.  Secondly, it would give a tremendous boost to VMH’s logistics efficiency. Information flow will be quick, data easily accessible, less paperwork will free up its professionals for more productive work, while inventory management capacity could receive a huge boost as the inventory and stock tally could be instantaneously and continuously  updated  (e.g. bed occupancy, stock of hospital supplies).  Thirdly, a huge reduction in  manual errors can result throughout the organization, which could lead to potentially huge cost-savings, as cost-effective healthcare systems can ill-afford ‘expensive’ errors. EDI is an essential part of SCM in modern healthcare organisations.

Strategic partnerships are an important part of modern SCM, whereby  short-term contracts based on tenders attracting lowest bids are replaced by on-going informal relationships with suppliers. VMH could benefit in the following ways by partnering with its suppliers :

1.  It could benefit from higher levels of productivity as its suppliers become experienced and responsive to its own needs. This is because with partnerships, mutual understanding of business needs grow with  time.
2.  Such arrangements could be cost-effective, as they minimize the necessity to look for and contract fresh suppliers at intervals; savings also result from being able to implement newer styles of inventory management like just-in-time (JIT) which minimizes the need for large stocks, as it becomes the  supplier’s responsibility to maintain adequate stock levels.
3. There are likely to be much less disputes and dissatisfied stakeholders, as long term strategic alliance ensures that everyone is more likely to  work in the best of  their ‘mutual’ (rather than own) interests, and can even generate a high degree of  ‘loyalty’.

   For partnerships, VMH should however remember that :

• Shorter supply chains make SCM easier, and hence, suppliers who can provide a large number of products and suppliers are likely to effective both in terms of efficiency and costs. The larger the business account it gives out to a supplier, the more VMH can demand volume discounts across a wider range of items.
• Partnerships with local suppliers would enhance VMH’s image of corporate responsibility in the eyes of the local communities by strengthening the local economy. This has to be balanced with outsourcing some activities like medical transcription, which cost  significantly less overseas.

The activities within VMH’s supply chain that can be best outsourced include :

• Setting up an EDI and other IT infrastructure essential to a new SCM system, and providing training for its staff,  because VMH currently does not have the capability or expertise to develop such systems internally. In addition, ongoing maintenance of the systems could also be outsourced as they would prove more cost-effective in the long run than setting up its own I.T. department. Medical transcription and data archival is another key related area that is best outsourced on cost grounds.
• Publicity, medical communications and external website maintenance : This is also another rapidly evolving specialized area, and to maintain competitiveness at par with  the rest of the industry,  outsourcing is a good idea.
• Several key logistical areas like security, transport and handling of patients, materials and waste disposal  are also suitable for outsourcing. They do not relate to VMH’s core competencies in healthcare, but need professional handling.
• Housekeeping and catering are also commonly outsourced by healthcare organisations, and should be considered by VMH too.

    The issues  to remember before outsourcing are :

• The move to outsource might be deeply unpopular with existing employees and suppliers, unless there are  significant strategic and cost benefits in doing so.
• Good contractual agreements  must be in place to protect VMH in the case of unsatisfactory performance and sudden change of circumstances, with a robust escape clause. The legal expenses can be significant if outsourcing runs into difficulties.
• Outsourcing must not affect the organisation’s key competencies- otherwise it will lead to reduced organizational learning and affect its future competitiveness. The areas indicated above as suitable for outsourcing are not ‘key’ healthcare areas.

For a managed healthcare organization like VMH, purchasing presents several areas of conflicts of interest and ethical dilemmas

1. Cost-effectiveness decisions affecting individuals versus the population – The most cost-effective solution for many healthcare situations might not be the best, and  managers are often compelled to consider cases on an individualized  basis when it comes to ‘expensive’ purchases. For the same infection, the available  antibiotics might differ widely in cost and efficacy. In addition cost considerations may lead to managers ignoring some of the potential drawbacks of preferred supplies and services.
2. Purchasing experimental treatment options  is a leading area of ethical dilemmas as well as conflicts of interests, often between the medical professionals and managers.  Similarly selective investment in technology to develop future capabilities for the organization may lead to conflicts between groups, as some may feel unappreciated and neglected due to an ‘underinvestment’ in their specialty.
3. Suppliers often give corporate gifts or sponsor events to promote their products, and in return, endorsing their product, particularly  for organisation-wide use, may in itself present ethical dilemmas.
4. The ‘medical necessity’ debate may also present problems for purchasers, as some stakeholders will argue about the ethical validity of purchases that would not directly benefit consumers (patients).  Such advocates may be highly critical of expenses on décor, recreational facilities, managerial and publicity expenses, ‘unproven’ but popular medical items and devices.
5. In cases of competitive bids, important ethical issues regarding breaching secrecy to secure competitive prices from preferred suppliers may arise.

     Managed healthcare purchasing, as we can see, is fraught with ethical dilemmas and conflicts of interest.

Apple Inc., a consumer electronics firm, is more perceived as a marketing company than a technology company.  This turnaround is brought by the experiences of the company throughout the years by learning with its business mistakes, retaining the core principles, and expanding operations through extensive partnerships.

This paper analyses of the firm’s primary and secondary activities that led to a transformative, profitable company outwitting its competitors’ moves.  The primary activities of the company includes the inbound logistics, operations, marketing and sales while the secondary activities includes purchasing, human resource management, and technology.  Apple Company has the following value chain.

Apple Inc.’s dedication in its own manufacturing operations starts with the right moves in the acquisition of raw materials.  The company has realized that outsourcing raw materials that are core ingredients in a product that is otherwise already available in the market is a step to their competitive advantage.  This cuts down the cost in research, manpower and technology, the major setback is the high procurement cost of the supply.  The company then turns to look at a long term perspective where the technology can immediately return the profit at a short period of time.  This is of course a gamble to the company who is starting this strategy.  Hiring supplies externally raises the issue of control and risk that is equated to a cost to the company.  Since the company will be relying heavily on its suppliers, it had developed a control system called Suppliers Code of Standard that can measure manufacturing standards, labor related issues, sourcing of raw materials, and ability to meet deadlines.  The expertise of a supplier is an advantage since they focus on the quality of a certain product that serves as a raw material in the packaged hardware that Apple Inc. manufactures

One move made by Apple is the partnership with Intel that reaped rewards not just for profit but for the delivery of products.  Before, the company’s chips called PowerPC and supplied by Freescale (previously Motorola) and IBM    took years to integrate the technology and offer to the public.  With Intel, the transition period commenced earlier than expected and had its PCs available to the market before target date.  This move is an advantage for the company where most of its competitors are already using Intel chips and its latest Intel Core Duo during that time.  This helps the Apple Macs at par with its competitors and added value to its customers Apple Inc. also made use of vertical integration where it purchased NeXTstep, a company with the technology of a multi-tasking operating system.  This helped in the development of the now available in the market, Mac OS X.  This venture, helped lower down the cost of developing the same technology and is now readily profitable and multi-branded (Leopard and Tiger) in the market.

The forging of partnerships with meaningful improvements with its suppliers had contributed to Apple Inc. turnaround from its past failures in the computer manufacturing market.  Investors have responded positively in the new ventures and diversifications of Apple Inc. from its core computer lines.  It increased shares to $14 in 2002 and catapulted to $120 in May of 2007.  Winning the trust of the shareholders increases value to its public in a long term perspective. Apple should adopt collaborations that is involving a number of processes that are considered to be important. The processes to be considered includes the customer finance operations and people. In this objectives, collaborations processes is defined and you will find issues like design of the product outsourcing configuration of the project and product development.

If Apple operates worldwide without collaboration they will find themselves out of business in a  short while. Business managers world wide today, are thinking collaboration and are adopting of globalization and outsourcing. Its open secret that in corporate world today whether business is family or owned by many management of innovation has become real issue. In the past many have been talking of strategic alliances which is part of collaborations only collaboration is a new idea which means

Me + My team                                   =                     We.

We + our family                                =                     Corporate.

Corporate + surroundings             =                     Community.

Community + communities          =                     Country.

Country + All                                    =                     World.

World = You & I                              =                     Each one of us

Therefore collaboration means Apple and another company somewhere in world form part of the business for purposes of sharing resource.    Collaboration has improved profitability market share, and the time at which the product reaches the market for a company like Apple incorporated. What is remaining currently is to look ways in which collaboration can be improved to increase production and increasing the market share for a number of products which is being sold.

Apple incorporated ejoys a number of favorable factors. There are disadvantages as well. The long term success of the company entails consolidation of those favorable factors while focusing upon and overcoming the weaknesses. The company must continue with the following that ensured its success in the past.

• Strong market position
• Robust financial performance
• Product development
• Strong focus on innovation
• Mergers and acquisitions wherever relevant

The company has done well to establish the permanent goal of 20 percent growth, and all its activities must be geared to this end through thick and thin. The company can make the best use of available opportunities to further its advantages. These are:

• Acquisition of Sightline Technologies
• New product launches
• Aging population in the U.Sand world over

However, it is critical to success that the company addresses some of the weaknesses that can be fixed with a focused approach. As of now these weaknesses have surfaced in the following forms:

• Weak sale of PC
• Geographic concentration
• Low operational efficiency

Apart from these weaknesses the company also needs to handle the threats that can cause considerable problem for the company. These are: Industry consolidation: The electronic industry has undergone dramatic consolidation in the last few years. Larger players have attempted to increase market share and product portfolios through mergers and acquisitions. This could lead to a price war, thereby reducing the operational cost of the company. It could also reduce the company’s share in the global market.

Evaluation and Conclusion

The company is among the top ten players in the industry riding high on its philosophy of helping and connecting to millions of customers the company has worldwide. The other strong point of the company is coming out with solutions to smart challenges in the form of marketable innovations. Notwithstanding weak sales of PC the company is optimistic about its long-term growth.

Apart from the U.S market the company has made a significant presence in the global markets like Japan and Pacific. The company has partnered with or acquired the other companies to come out with better and state of the art products in the frontier areas.    Apple incorporated is also slowly and gradually reaching out globally, and is hopeful of its recent foray in the Indian market.

References

1. Johnson & K Scholes; (1999); Exploring Corporate Strategy: Text and Cases, Fifth Edition, Prentice-Hall, 1999, ISBN 0-13-080740-0.
2. Mintzberg H.(1979); The Structuring of Organisations, Management Science, Vol 24, 1979, pp 937 – 948.
3. Porter M. E.; (1980); Competitive Strategy, MacMillian.
4. Value Chain Dynamics in the Communication Industry available at www.cfp.mit.edu/docs/core-edge-dec2005.pdf accessed on 15th October, 2005.
5. Outsourcing and climbing a value chain available at www.kellogg.northwestern.edu/faculty/greenstein/images/htm/Columns/Outsourcing.pdf  accessed on 15th October,2008.

Facility Management: A Literature Review

1. Introduction

Firms commonly manage resources such as human resources, financial, information and products that have been significant for the competitiveness, profitability and sustainability of the business. However, there is another resource or asset which has not been discussed and given so much attention: the facility. Facilities are commonly known as the supporting infrastructure, equipments and tools which are essential in the workplace and for the business to function properly.

In this paper, the focus is on facility management which has recently gained attention from the managers. Discussed herein are the origin, concepts, and scope, as well as its importance not only in business but also to other organizations such as hospitals and schools. The objective of the paper is to review related literatures that provide information and better understanding of facility management.

2. Origin of Facility Management

The concept of facility management (FM) was first conceived in the United States and in 1980s, it has been spread over the US and Europe (Nonoyama, 2006). Facility management then was originally focused on cleaning, maintenance and security but has eventually developed to include more strategic and broader services. The concept was brought to Japan during the mid-1980s when businesses realized the need for facility management during consolidation of office or when building new ones. FM has become helpful in determining the design that would facilitate proper work flow, document flow and movement of people (Nonoyama, 2006). Facility management today is not only concerned on the maintenance and security but also on the proper design of the system of facilities for better maintenance, security, cost reduction, and maximum functioning of every facility involved in a business.

3. Facility and Facility Management Defined

One can imagine how a business performs its activities without the necessary facilities to support such activities. According to Alexander (1999), facilities in a business context are the premises and services required to accommodate and facilitate business activity. Therefore, facilities include the building itself where business activities are conducted and where hardware such as equipments, tools and furniture are located. Because it includes the equipments and tools, it has direct significance to product or service development. The quality of the products and services that a business creates depends so much on the functionality and performance of its facilities. Additionally, the building itself and the related systems (e.g. HVAC system) should be designed based on its identified function. For example, the design and function of a hospital building is definitely different from the design and function of an industrial building and will depend on the type of equipments that will be put into it and the people that will use the building.

 The concerns therefore of facility management encompasses the management of the above mentioned facilities. Traditionally, facility management was concerned with the ‘hardware’ such as the buildings, furniture and equipments (Becker, 1990); Cotts & Lee, 1992). However, Alexander (1999) and Then (1999) later included the ‘software’ such as people, process, environment, health and safety in the responsibility and scope of facility management. This definition suggests that facility management should be concern not only in the physical assets but also in the workplace itself where people and process interact with the physical assets and the results of such interactions which involved the health and safety of the people and the environment of the organization.

Moreover, Becker (1990) further defines facility management as the building in use, the planning, design and management of occupied buildings and their associated building systems, equipments and furniture to enable and to enhance the organization’s ability to meet its business or programmatic objectives. Cotts & Lee (1992) define facility management as the practice of coordinating the physical workplace with the people and work of the organization, integrating the principles of business administration, architecture, and the behavioral and engineering sciences.

For Alexander (1999), facility management is the process by which an organisation delivers and sustains agreed level of support service in a quality environment at appropriate cost to meet the business need while for Then (1999), it is a hybrid management that combines people, property and process management expertise to provide vital services in support of the organisation. Tay and Ooi (2001) provide a broader definition of facility management as the integrated management of the workplace to enhance the performance of the organisation.

With all these definitions, facility management therefore is a practice or discipline that encompasses a wide scope while its primary objective is to provide support for the enhancement of the workplace. In short, facilities management is simply the administration of the workplace, its people and its environment.

4. Scope and Objectives of Facility Management

As noted above, the primary objective of facility management is to support an organisation in enhancing the workplace. The workplace, on the other hand, involves the people, the physical and financial resources, and the processes and operations of a business, thus facility management practices must have positive effects on these resources. Additionally, the strategic objective of facility management is the effective management of facility resources and services in providing support to the operations of organizations (Nutt, 2000).To be able to enhance the workplace, the objectives of facility management are:

1.  to design facilities for efficient use;
2. to optimize facility operating cost; and
3. to improve job satisfaction of employees (Nonoyama, 2006).

Therefore, the result of facility management is a highly functional workplace. Read also under what circumstances should a company’s management team give serious consideration

4.1 Objective 1:To Design Facilities for Efficient Use

It is included in the practice of facility management to design the workplace (e,g. plant, office or store) and other facilities in such as way that they will be efficient and of importance to its users. The users may include the workers for manufacturing industry settings while for commercial service organizations like hotel, restaurants and malls, users include the customers. Efficient here means that every space and equipment is functioning and useful for the business not only for the present but also during its life cycle. Design of facilities includes:

1. the architecture, structure and location of the building;
2.  the strategic positioning of equipments that will help users perform their task efficiently; and
3. the presence of important systems or facilities that are necessary to perform business activities.

For example, a manufacturing plant must be located near its suppliers and where there is an easy access to transportation; its equipments must be position based on the processes involved (e.g. all machines for assembly must be placed in the assembly area while all test equipments can easily be found at the test area); and there should be warehouse where finish products are stored and that warehouse must be designed to be accessible to delivery vehicles.

The design of facility is often perform by external resources like outside contractors. Contractors are companies whose focus and expertise are on the design and construction of facilities. They employ architects, engineers, surveyors, and technicians. According to Payne (2000), there are four areas in which various professionals are involved in facility management:

1. property and built environment that require the professional skills of architects, legal services, space planners and quantity surveyors;
2. the interaction of people with the built environment that has required human resources professionals, building services and environmental engineers;
3. the technical expertise of maintenance staff (e.g. equipment technicians); and
4. the process that take place within the buildings such as catering, cleaning, security, mailroom that require practical operational management form a range of professional backgrounds. Organizations need these professionals to ensure that the design has integrated the “hardware” and the “software” components of facility management.

In the design of facilities, most organizations seek professional help from external sources because the activities involved in designing are not their core competency; as noted above facility management only supports core business, it is not the core business. For example, a manufacturing organisation (e.g. Semiconductor company) wants to have an assembly facility in another location. Although the organisation may be able to determine the strategic location for the facility, the company, since its activities are in electronics field, it would be better and practical for them to externally outsource the design and construction of the facility in order to focus more on the business itself.

However, it is important that the corporate plan of the firm is integrated or in line with the design of the facilities. According to Bernard Williams Associates (1999), facility management has three facets: sponsorship, intelligence and service management. Sponsorship pertains to the ownership of responsibility for the provision of facilities, the implementation of the policy involved in the provision of the facilities, and the provision of maintenance, allocation, accommodation and services of facilities in order to perform corporate objectives. Intelligence, on the other hand, is the component of the facility management that determines the needs of the business and ensures that these needs are met effectively by employing techniques and technology that will support the facilities.

Service management is the services related itself such as the design and construction, cleaning, maintenance and security that are usually provided by external resources. Design and construction are outsourced from construction companies while cleaning and maintenance (of building for example) are outsourced from janitorial services companies. Maintenance of equipment such as machines is either outsourced from the supplier or performed by in-house staff like technicians to ensure continuous operation of the machines.

In other words, the design of the facilities, not only the building but also the equipments and tools, is created based on the needs, processes and objectives of an organisation but are carry out by the experts that are usually external to the organisation. As noted, an organisation must create a corporate plan where the strategic and operational needs, core business and objectives of the organisation are clearly stated. Additionally, the needs of an organisation are continuously changing that requires the facility design and layout to easily adapt and comply to the changing needs of an organisation.

4.2 Objective 2: To Optimize Facility Operating Costs

According to Nonoyama (2006), the greatest advantage of facility management is cost reduction through optimization of facility operating costs. In Japan, for example, the facility operating costs are composed of rent and service fee, maintenance, depreciation, administrative, taxes, cleaning, utilities and others (JFMA, 1998). When an organisation owned its facility, depreciation accounts to almost 50% of the total operating costs followed by maintenance and administrative costs which are both 15% of the total operating costs. Since facility management has design the facility to be at its most efficient, it can then reduce costs. To reduce maintenance costs, a facility must be designed to be low-maintenance. For example, the HVAC system of a building may include energy-saving equipments and low-maintenance air conditioning systems. Cost can also be optimized by designing every space in the workplace in such a way that it can contribute to productivity and efficiency of the organisation.

Outsourcing of facility management-related services also reduces the cost of services needed by organizations especially today that many facility management-related service providers have emerged. Presently, facility management has also become another industry; there are companies who offer clear-cut energy savings and cost reduction, building maintenance which includes maintenance of the systems in the building and the building itself, and office furniture supplies and interior design (Nonoyama, 2006). There are also computer manufacturers and software providers that offer services for the maintenance of an organization’s information technology facility. This industry exists primarily to help an organisation become more focus on its core business.

In the United States, US companies outsource most of their facility management-related operations to service providers according to the American Management Association (Nonoyama, 2006). Figure 1 shows the percentage of the operations that have been outsourced by American companies. In the figure, it is noticeable that US companies do not outsource the maintenance of their equipments because it is more practical to have in-house experts that will maintain their machines and equipments to ensure continuous operations and production. Additionally, equipments in the manufacturing industries have become part of their core business; that is equipments have become a critical part of a company’s production process and must not be entrusted to external resources.

In Europe there are also several companies that specialize in providing comprehensive facility management services.

 Outsourcing of FM-related services has provided an organisation the expertise needed for the maintenance of its facility while the organisation has maintain its focus on its core business. Operating cost has been reduced because facilities have been maintained, will not depreciate easier and have longer life.

4.3 Objective 3: Improve Job Satisfaction of Employees

Employees are the primary users of an organization’s facilities, thus are affected by facilities design and operations. Employees are actually part of the “software” facilities that are considered in the design of every facility. Considerations are given to how users can maximize the usefulness of the facilities, to what facilities are needed by the workers, to how safe to use the facilities and to how such facilities can improve their work and their performance. When employees are safer in the workplace, employees will be satisfy with the job thus increasing production and benefiting the organisation. Company provides facilities for the safety and comfort of the employees through facilities management.

5. The Facility Manager

The primary practitioner of facility management is definitely the facility manager aside from the experts mentioned above. According to Tay and Ooi (2001), “a facility manager reports directly to the director or top management of the firm on workplace issues and performance. He received formal training in multiple skills like human resource management skills, financial management skills, and technical skills to manage the workplace for the purpose of enhancing corporate goals. He is likely to lead and manage a facility management team, which assists the day to day operations in the workplace while he focuses on strategic workplace planning and organizing issues.”

 Moreover, a facility manager is also a business manager who is responsible for promoting organization’s productivity and protecting the employees’ quality of life. Productivity is promoted by the facility manager by ensuring that every facility that are important in production function properly and effectively and as stated above, every space in the workplace contributes in productivity. A facility manager protects the quality of life on employees by creating comfortable and safe facilities and workplace that help employees perform their job easily. A facility manager ensures that no facility can create harm, hazard or danger to employees through maintenance and regular inspection of facilities. He is a business manager by performing responsibilities not only at the operational level but also at the business level, keeping in mind that he has to perform his jobs strategically to create improvement and give the organisation a competitive advantage. At the business level, a facility manger must ensure that facility strategic plans match corporate strategic plans; capital expenditures are planned and controlled; employee productivity is maximized; and costs are minimized and predicted (Connors, 2003).

Because of the broadness of the tasks of a facility manager, it is recommended that facility managers have previous experience in office services, construction and/or engineering (Price & Akhlaghi, 1999). This is because the job of a facility manager is technical in nature but also requires understanding of aspects of business such as cost reduction and people management. Cotts & Lee (1992) and Bernard Williams Associates (1999) added that leadership and communication skills are the most important attributes of facility manager to be able to hold effective employees. This is because a facility manager should effectively lead a team of mostly technical people at the same time should have the awareness of how to provide quality life to the people at the workplace.

Facility managers are also responsible in protecting the organization’s assets by providing security. The importance of security in the facility management profession is driven by

1. homeland security;
2. terrorism and war;
3. public and media;
4. liability and corporate alliance;
5. increase in cyber threats/attacks and identity theft;
6. and technology.

 Information technology also drives and requires a facility manager to be highly technical to be able to have the intelligence needed in integrating technology with the facilities of the organisation. According to Bull (1996), IT today is not only considered as one of the facilities of an organisation but has become extremely important in managing the business because it holds external company information, customer and supplier information, building security information, and production and operation information. IT is also important in planning, designing and storing facility information. Computer Aided Designs are used in the design of the building while data bases are linked to CAD for facility management applications (Connors, 2003).

For the facility manager to measure the performance of his team, Nutt (1999) suggests the following performance criteria:

1. the extent to which facilities support or can be adapted to the changing needs of an organisation;
2. the contribution that facilities make to organizational effectiveness;
3. the value added by effective management;
4. improvements in service and environmental quality; and (5) the risks associated with using facilities.

6. The Future of Facility Management

It is more likely to see facility management as driven by the changes in technology and the business environment. It is also likely to see the industry of facility management to grow due to the need to reduce operating cost and due to the need of companies to focus more on its core business driven by increased level of competition. The NLI Research Institute also formulated a diagram that shows the environmental changes that encourage the spread of facility management.

7. Conclusion

Based on the most literatures, facility management has been an important practice for the organizations that seek to integrate the physical assets (facilities) and the intangible assets of the organisation. Such integration requires careful management but has been proven to be of great benefit to the organizations.

References:

1. Alexander, K. (1999), Editorial, Euro FM Practice: facilities management, ARKO
2.  Publishers, Nieuwegein, The Netherlands
3. Becker, F. (1990), The total workplace: facilities management and the elastic
4. organization, Van Nostrand Reinhold, New York, USA
5. Bernard Williams Associates (1999), Facilities Economics: incorporating ‘premises audits’, BEB, Chippenham, UK
6. Bull, P. (1996), The secret of a successful FM marriage, Facilities, Vol.14, No.12/13pp. 38-41, MCB University Press
7. Connor, Phil (2003) Innovation Process and Innovativeness in Facility Management:
8. Comparative Case Study Retrieved online on November 28, 2006http://www.strategie-vsb.nl/pdf/5.pdf
9. Cotts, D.G. & M. Lee (1992), The Facility Management Handbook, AMACOM, New York, USA
10. JFMA, NOPA, BELCA. (1998) Facility Management Guide Book Second edition (translated by Kumagai).  Nikkankougyo-Shinbunsha, Tokyo.
11. Nonoyoma, Naoko, Prospects for Facility Management Services Reducing Office
12. Costs and Improving Efficiency, Retrieved online on November 28, 2006 http://www.nli-research.co.jp/eng/resea/econo/eco9803b.html
13. Nutt, B. (1999), Linking FM practice and research, Facilities, Vol.17, No.1/2, pp.11-17, MCB University Press
14. Nutt, B. (2000), Four competing futures for facility management, Facilities, Vol.18, No.3/4, pp.124-132, MCB University Press
15. Payne, T. (2000), Facilities Management: A strategy for success, Chandos Publishing, Oxford; acc. Tay & Ooi (2001)
16. Price, I. & F. Akhlaghi (1999), New patterns in facilities management: industry best practice And new organizational theory, Facilities, Vol.17, No.5/6, pp.159-166, MCB University Press
17. Roberts, P. (2001), Corporate competence in FM: current problems and issues, Facilities, Vol.19, No.7/8, pp.269-275, MCB University Press
18. Tay, L. & J.T.L. Ooi (2001), Facilities management: a “Jack of all trades”?,
19. Facilities, Vol.19, No.10, pp.357-362, MCB University Press
20. Then, D.S. (1999), An integrated resource management view of facilities management, Facilities, Vol.17, No.12/13, pp.462-469, MCB University Press
21. Today’s Facility Manager, Physical And IT Security: Converging With The Traditional Roles Of The Facility Manager
22. Retrieved online on November 28, 2006 http://www.todaysfacilitymanager.com/tfm_03_03_special.asp

It was the year 1990 when the word ‘outsourcing’ first gained fine attention in the business industries. At the brim of industrialization and globalization of industries, several changes in the society began. As an economic phenomenon, globalization is a shift from distinct national economies to a global economy. In today’s “global village,” the production of goods has been internationalized, and money flows freely and instantly across borders. It is virtually trade without borders.

In this system, multinational corporations wield vast power, while anonymous investors can foster material prosperity or cause devastating depression in any part of the world. Globalization is both a cause and a result of the modern information revolution. It is driven by dramatic improvements in telecommunications, incredible increases in computing power, and the development of information networks, such as the Internet. These technologies are helping to overcome the barriers of physical distance. With what results?

According to its proponents, globalization can be a whirlwind of trade and investment that builds economies and spurs development in even the world’s poorest countries. For example, during the 1990’s alone, foreign investors have poured one trillion dollars into developing economies. This phenomenal increase in international investment has made the building of roads, airports, and factories possible in poorer nations. Globalization has indeed been a force that has raised living standards for some across the world.

Peter Sutherland, chairman of the Overseas Development Council, says that “until recently, it took at least two generations for living standards to double, but in China, living standards now double every 10 years”. Globalization is perceived as bringing unprecedented opportunities to billions of people. The staggering expansion of world trade has induced a wave of productivity and efficiency and has created new jobs. The Truth behind Outsourcing Strategies

Universally, globalization has placed great pressure on working people as governments force down wages and labor standards in an attempt to attract foreign investment with the promise of low costs. While some newly industrialized countries have profited from increased exports as a result of freer global trade, poorer nations have been largely excluded from the feast. Along with this, the economic enthusiasts saw the possibilities of using the low-cost options of taking the skills of other poorer countries in becoming a part of the work force of their growing economies.

It all seemed so practical at first; however, some considerations placed some pressures on the matter. True, the skills of the third world communities are indeed lower rated than that of the local American employees. This is the reason why putting up establishments in countries such as the Philippines, China, India and Taiwan have been much beneficial for many big corporate companies in the American continent. Their establishments or branches outside the country have cost them lower capital amounts and higher profits.

In every way, the companies really are able to get the best out of the said economic approach. On the contrary, there are some sectors of the community that does not compromise to the expected beneficial effects of outsourcing to the economy. As said earlier, outsourcing is mainly the way in which companies are able to shift the company jobs from internal production towards an internal entity. This is in an aim to lower the costs of both production and capital expenses and in other way focus on the competencies of the company.

The Essential Effects of Outsourcing to the Society For the most part, hopes are set on an economic upturn. However, some people are skeptical and think that such an upturn will not have occurred until the year 2000. For others, recovery has already begun, but it is slow in producing results, as is evident from the recent drop in employment in Italy. Economic recovery does not necessarily mean a reduction in unemployment. While growth is modest, businesses prefer to utilize better the staff they already have rather than to employ others—that is, there is “jobless growth.

” Further, the number of unemployed often grows faster than the number of new jobs created. The experts suggest many recipes for fighting unemployment. Some are even contradictory, depending on whether they are suggested by economists, politicians, or workers themselves. There are those who propose offering companies incentives to increase personnel by reducing the tax burden. Some advise massive state intervention. Others suggest distributing work differently and reducing hours.

This has already been done in some large companies, even though during the last century, the workweek has been systematically reduced in all industrialized nations without a reduction in unemployment. “In the long term,” maintains economist Renato Brunetta, “every policy turns out to be ineffective, with costs that exceed benefits. ” Besides all the enthusiasm of governments to face the issue on unemployment through globalization and outsourcing, many still fail to reach their aims of giving better living options for the people of their own races.

Unemployment is an old problem. For centuries people have on occasion found themselves involuntarily without work. Once the job was finished, tens of thousands of workers used in large construction projects then became unemployed themselves—at least until they were absorbed elsewhere. In the mean time, they led a rather precarious existence, to say the least. Today, as outsourcing is directly implemented by many corporations, the American society is indeed a threatening issue for local American Workers.

In a country where most people are expected to have work and work their way to be able to get the basic necessities in life, it is not easy to live by with no work at all. Certainly, unemployment is a major problem for the population in this community. This is the reason why the implementation of outsourcing has been much questioned and rejected by the wide working population of the American society. True, as the jobs are given to the other establishments outside America, many potential workers from the local American community lose their chance on being able to work for the company.

As a result, part-time jobs became a trend to the labor sectors in America. “American workers are actually working or producing for only about 55 per cent of the time they are on the job,” answers a report from Theodore Barry & Associates, a management-consulting firm. “By contrast, their grandfathers produced for 80 to 85 per cent of their time at work. ” Though productivity of workers in other industrial nations is also down significantly, American productivity is down more sharply. The wasted time is said to be costing U. S. business $350 billion a year. (Dobbs, 6)

Conclusion Indeed, the idea of globalization was believed to bring in some definite fine success behind the economic progress aimed by the Global trade industries. However, outsourcing, as a result of this economic breakthrough has caused a lot of problems to many local workers of the large-scale economy of different countries around the world. Certainly, it must always be considered by economic industries that being able to create economic innovations designed to promote global progress must not only be focused on giving opportunities of profit for business investors.

Instead, it must always bean innovation’s aim to provide benefits to all the sectors of economy, thus making the distribution of profit rather equally given to the different sections of the global economy.

BIBLIOGRAPGHY

Jens Dibbern. Dibbern et al. /Variations in Client Extra Costs. MIS Quarterly Vol. 32 No. 2, pp. 333-366/June 2008 333. SPECIAL ISSUE EXPLAINING VARIATIONS IN CLIENT EXTRA COSTS BETWEEN SOFTWARE PROJECTS OFFSHORED TO INDIA.

1. Reasons why Menorca is a popular destination from the UK, Germany and Scandinavia:

* With rising amounts of disposable income, tourists can afford to travel further on their holidays. This has also led to the demise of such British holiday resorts such as Brighton, Blackpool and Cornwall.

* Also, the diminishing costs of flying due to budget airlines providing charter flights and the construction of a new airport with a longer runway coupled with the reduced time of flying to Menorca due to advances in Jet aircraft and the smoothness of arranging a holiday through Package holidays mean that flying to Menorca is less strenuous, more hassle-free and accessible than in the past.

* The climate is more tropical because it is further south than the UK, Germany and Scandinavia. Also, due to the island’s small size, no residency will be far from the beach.

2. The attractions for tourists as illustrated by figures 3.40 and 3.41:

In Figure 3.40:

* The white sand and clear blue sea- the coast. In combination with the climate, attractive for tourists that enjoy beach holidays.

* The scenery – Menorca has a lot of forestry. It is much greener and lush than its Balearics.

* Development one the sea front- means that there are hotels right on the seafront that allows excellent access for tourists that want a beach holiday.

* A promenade along the coastline- means that tourists that wish to walk along the coast without walking along a beach full of people. By being on the edge of the forest, it encourages people to take an interest in the environment and allows people who want ‘quiet recreation’ to pursue their desired activities.

Figure 3.41

* The harbour is an attraction for tourists.

* The open-air caf� by the water provides a relaxing stop for the tourists.

* The boats indicate that water ports are an appealing past time for holidaymakers.

3. The jobs that will have been created by the tourists will be:

* Craft and retail industries will have increased custom due to increased population.

* Services industries eg. Food production, builders, restaurants, caf�s, hotels, taxi drivers/car hire

* Airports will produce jobs for local communities

* Civic services will employ more people to sweep towns etc.

4. When tourists bring money to Menorca, parts of the income proceed through taxes to the government, who spend some of the money on public services (eg. Better roads, hospitals, redeveloping downmarket areas etc.) This money then encourages more people to come to the country that brings even more money in through taxes that can be spent on public services. This is repeated over and over.

5. Menorca attracts few tourists during November-April due to two things:

i. The climate. During the winter months, the temperature is rarely above 15OC. Also, the monthly rainfall for the 6 winter months averages at 5.5 mm. This is compares with an average temperature of 27OC during the peak summer season – June, July and August. In these three months, the average rainfall is 1.3 mm. The less attractive climate during the 6 winter months means that holidaymakers going for ‘sun and sand’ will be more likely to go during the three summer months (June, July and August) than during the winter months.

ii. The other reason is that most families go on holiday in summer due to school holidays and booked absences from work. This also ties in with part I). Holidays in the summer are more convenient from an organisation view, and provide the best weather.

6. The problems caused by the influx of tourists to the island are:

iii. The lack of income during the winter due to the decrease in tourism.

iv. The local environment. The tourists will leave more litter, lead to an increase of pollution due to the industrial expansion that is needed to provide a good service to the tourists. The tourists will also damage things such as the woodland, and the animals to which the woodland is their habitat by trekking through the greenery. Also, room is needed to expand the countries’ infrastructure, which could well lead to deforestation.

v. The cultures of the local Menorcans will be diluted by the import of foreign cultures. Eg. Cuisine, language, currency, music and manners.

7. The disadvantages and advantages of the use of the local language, Minorqui are:

Advantages:

The preservation of the local culture, and to make sure that the local population do not get too disillusioned with the measures taken concerning local tourism

Disadvantages:

Is not helpful to tourists, who could find it hard to understand the happenings in Menorca. This could a factor that prevents tourists going to Menorca repeatedly, lessening sustainable tourism. Also, they may collect less revenue from advertising due to the lessened interest from companies trying to influence a foreign audience, who will not understand them.

8. To protect the environment, the Menorcan officials are:

* Prevent buildings 250m from the coast can be no more than two storeys high.

* A bridle path around the coast to encourage quiet recreation has been set up.

* The UN have designated Menorca a Biosphere Reserve to acknowledge the natural environment of Menorca.