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CPO Summit: Productivity - The Real Enemy

November 13th, 2007 · by Tim Minahan · 2 Comments · events, outsourcing, supply management, supply market dynamics

Our guest blogger Andrea Soltysiak is back on the case, this time profiling the comments from CPO Summit keynote speaker Michael Treacy. Although, I must admit, this long-time management guru and author (whose Discipline of Market Leaders is a must read) seems to have softened in his old(er) age. The usually controversial Treacy takes aim at the importance of productivity.
From Lou Dobbs to Gartner, a panic surrounds offshoring and outsourcing. Yes, I am all for creating new jobs. As a worker and manager, I want the comfort of knowing my job is in demand and my team’s jobs are secure. However, as a consumer I am not willing to pay more for American-made products. And, as keynote speaker and best-selling author Michael Treacy points out, I’m not alone. But it’s not offshoring and outsourcing that are causing job loss.

Treacy, author of Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market and Double-Digit Growth: How Great Companies Achieve It - No Matter What, highlights General Motors in his presentation. In the last 25 years, 67,000 jobs were lost per million cars produced at GM. Nineteen thousand jobs were lost due to onshore outsourcing; 8,000 lost due to offshore outsourcing. What happened to the remaining 40,000 jobs, Treacy asks? Productivity gains.

Productivity is the real enemy. He cites that only 300,000 jobs are offshored each year. A pretty small fraction when looking at the overall job market.

Traecy also predicts that “All work will migrate to where work gets done best”. He claims that we will compete for our jobs on a global basis, except those jobs deeply affected by location (think doctor’s office). The reality is that there are five tutoring companies today that will match your child with someone in India to help with his/her homework.

Interesting thoughts. Do you agree?

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2 responses so far ↓

  • 1 Paul Gooch, The Logical Group // Nov 15, 2007 at 2:54 am

    Nothing very earth-shattering in here. If your productivity improvement is not keeping pace with, or exceeding the rate of inflation, you’re going backwards. In order to put the GM numbers into perspective, what has been the cumulative inflation over the past 25 years?

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