From the Desk of the President

A few days back, as I was browsing through some news websites, one caption caught my attention.  It asked: “Is American Economy still down?”

This piqued my interest.  No, the economy is not down; in fact, the American economy of the recession of 2008 -2009 has changed significantly. The American economy is now growing at almost 3% annually, which is a big number for any developed economy.  Yet when we look around, the picture is not as good as expected; the unemployment rate remains high and the confidence of general consumers has not regained its peak 2006-2007 levels.  The housing market has yet to pick up, though signs of recovery are not far away.

So, what has changed? If you look on the positive side of economic recovery, the Big Three auto makers are holding their own, with Ford leading the pack.  Ford’s share price, which traded for $1.59 in 2009, touched $13 in last 3 months, nearly an eightfold increase in share value.  While Starbucks has closed nearly 1,000 stores in the US, they have opened more than 400 stores in China alone; this American company is still growing and expanding.  Another indicator of positive change is the 8 to 10 percent increase in the number of tourists visiting the USA, which means direct inflow of capital and export sale of services. Tourists pay for services such as hotels, car rentals, and admission tickets and so on.

It is de rigueur  these days to talk about job loss and then link it directly to Global Sourcing.  We in North America feel that companies that outsource are responsible for the loss of jobs. But, contrary to the belief that economic growth is a zero sum game, the rise of economic growth in other parts of the world allows the US to gain a great deal.  For example, Canadian giant Bombardier has almost half of the world’s requirements to build modern rail transport systems. Boeing is leading supplier of aircrafts; other related companies are building/upgrading infrastructure worldwide. What does this means for Global Sourcing?  It means that some economies will cater to the manufacturing side and some will cater to the service side.  For example, China is the manufacturing hub of the world, so that is their core competency, while India and part of Europe are showing their core competencies in the low-end IT and service sectors.

North America has led the world in Innovation:  Facebook, Google and iPhone are just few recent examples.  Besides being the largest food producers and exporters of the world, we are building the latest in infrastructure, telecom, networks, and information gateways worldwide.  Most American businesses have learned to work in a lean and more efficient way.  They are good at finding markets and customers and producing goods and services more economically.

What does this mean to us in Global Sourcing?   Simply put, American businesses are not wasting resources; in fact, they are increasingly creative with the resources they have.  Now is the time for our vendors and suppliers to be as creative and innovative as their customers are. In order to do so, vendors and suppliers need to source the knowledge and adaptability of their clients. Where does this knowledge come from? You guessed it, right from other side of the globe. This obvious need for a global conversation signifies the role the Global Sourcing Council is going to play. The result? Greater prosperity for both sides of the world.

I look forward to developing this discussion further with the involvement of our readers… □

Sanjay Sharma has over twenty years of Global experience in Information Technology, Supply Chain and Project Management. Sanjay has managed backend Sourcing and Procurement operations for large organizations in Europe, Far East & Australia. He led procurement operations for a large industrial goods manufacturing organization. Sanjay has articles published in business magazines and publications on the subjects of procurement, supply chain and project management. Sanjay speaks at Conferences, Seminars and Symposiums. He works as consultant for Project Management and Global Sourcing. In addition he teaches Project Management subjects. His email contact is sanjaysrr@gmail.com.