Supply Chain Management

As India continues to grow and is one of the top choices for outsourcing and offshoring, they need to realize they are beginning to play an important role in global supply chains. Today’s lecture focused on the challenges faced in India as they need to focus on issues of supply chain management in order to succeed internationally and for multinationals to understand cultural differences as they pursue efficiency, growth, and higher profits through outsourcing and offshoring. Both India and other countries worldwide need to accept and learn the strengths and weaknesses of each other in pursuance of innovation, information technology, and technological advances to produce high efficiency and profit.

In India, there is a growing trend for IT professionals and this gives India a competitive advantage as many multinational companies come to India and its institutes to recruit new hires. Today, there are more IT professionals in Bangalore than there are in Silicon Valley, and there are more than 50 multinational companies that get their chip designed in Bangalore! Most of these multinationals that have outsourced to India are saving money because India has a special capability to supply products in smaller volumes. For that matter, the world is becoming flat. Friedman discusses the challenges faced by companies that outsource and offshore. He says that outsourcing may not guarantee someone a job no matter how intelligent or knowledgeable they are in their field; what matters is if the person can add value to the company because of the extensive knowledge they have in their field. Because of that, many recruiters from the IT field come to India to find new employees because they know Indians have the entrepreneurial skills and knowledge of IT in order to add value to the company, and also the companies are benefiting financially because they can pay at lower rates. As for offshoring, it reduces costs for the company, but the economy of the country may stagger because all the jobs in that field are being moved to a different place. Like with IT, many of the jobs are moving to India and China and now multinationals do not only compete within the US, but also with the other companies in large countries like India and China.

Furthermore, Friedman discusses the triple convergence. With the opening of societies of China, India, Russia, Eastern Europe, Latin America, and Central Asia, the triple convergence is what really shapes global economics and politics. With the web-enabled playing field, information to anything is available at anytime. With technological advances, communication between different countries has become easier and allowed for collaboration amongst the countries to become horizontal. For India and the US to collaborate in the IT field has become very simple today because of the triple convergence, and that was seen from our visit to Automotive Axles Limited (AAL). They are a joint venture with the USA Arvin Meritor, Inc., and they manufacture rear drive axles. They export parts to the US and also provide for domestic companies. With the use of technology and their advanced IT systems, AAL is able to maintain their relationships both domestically and internationally. They must maintain their management in supply chain especially with the US as that plays an important role in the success of the Indian company, and for the multinational corporation. Here I have posted some pictures of the factory… it was pretty clean for a factory considering it was in India. It almost looked like it could be a factory in the US… the only strange part was that many workers didn’t have protective gear such as gloves and face masks, and many did not wear ear plugs.