I’ve increasingly become interested in supply chains and the outsourcing of product manufacture (note: I’m only referring to product manufacturing and nothing else). The latter is shrouded in positive and negative opinions from everyone including economists, the government and environmentalists.

The detractors argue that outsourcing has a negative impact on our GDP and unemployment rates; socially conscious tribes, not so concerned with economics, believe that it exacerbates sweatshop conditions in developing economies and environmental damage as result of increased shipping. Their points are fair and you needn’t dig deep in order to excavate the evidence: FTSE 100 companies occupy headlines for using child labour and reports claiming that western countries are ‘outsourcing pollution’.

In addition to the real world problems, consumer perceptions of products made in outsourcing hubs have, historically, been less than favourable. Early outsourcing attempts resulted in the manufacture of poor-quality products and the tags, ‘Made in China’ or, ‘Made in Taiwan’ connoted cheapness.

However, times are changing and so is the world of product manufacturing. Thoughtfully governed operations such as KTC are providing high-quality, sweatshop free outsourcing and logistics companies now offer carbon neutral shipping, which offsets emissions through energy efficiency initiatives and investing in verified emission reduction projects around the world.

Take product quality, labour exploitation and environmental damage off the table and you’re left with local employment and the GDP arguments. Does outsourcing erode the local job market? Not necessarily. Even with outsourced production, people are required in business operations including distribution, sales and customer service. Additionally, jobs are created throughout the business web: the businesses that support business.

I first read about agile business webs in Wikinomics back in 2008 and I’m now starting to think that small, agile businesses, which leverage supporting businesses when required, are exactly what’s required to refresh the UK economy. Moreover, processes such as outsourced, just-in-time manufacturing and distribution lower commercial overheads and barriers to market entry, which in-turn stimulate the growth of new businesses, making markets more granular—and monopolies smaller.

Photo props

Chains, franchises and well known High Street retailers have been retreating or down-sizing, for over two years, since the closure of Woolworths. Premium retail space is now left vacant or occupied by independent traders selling low-quality, imported goods. In my opinion, the influx of independent trade erodes the cookie cutter strategy: the efforts of a group of holding companies to monopolise and replicate town centres across the country.

Next to Footlocker you will find Kaza Shoes and opposite Marks & Spencer there is Fresh Fashions. It’s all very interesting. Independent retailers are drawing in the masses once alienated by the chains, and now a walk through the town centre provides a realistic sample of the town’s population composition: Albanian and Polish immigrants, industrial estate workers from Britwell and Farnham, Asians from Cippenham and small Arabic and Lebanese communities.

Noting the changes makes me realise how local trade, through the influence larger companies, was geared to only cater for one class: the monied middle class, which probably accounts for 20 -30% of East Berkshire’s population. The town’s population hasn’t significantly changed as both grammar schools attract very well to do families; however, Middle Britain tightening its purse strings is evidently empowering small business owners and breathing life into a new, rebalanced local economy.

Scratch notes (ignore grammar mistakes and embrace swearing).

I’ve been thinking: developed economies spent – at least – a third of the twentieth centry trying to repair economic damage incurred by war, gain economic momentum and grow. A focus on growth, margins and profit, from the fifties and onward, created faceless organisations, which produced medicore quality, mass produced products and services. Comodification was the overall output of these economic notions and organisations.

Suddenly, and not without reason, production costs began to rise and businesses started to outsource their operations because they were predominantly competing on price and not much else aside a brand name. This went on for sometime and then global compeition, coupled with an increase in foriegn imports, started to kill off local manufacturing. The faceless organisations began to lay people off; jobs were lost; we just kept on buying shit from elsewhere because it was cheaper. Customer experience was forgotten and the economy suffered because businesseses lost their passion and innovation due to organisational bureaucracy, six sigma crap (you know who you fuckers are) and the accumulation of dead wood.

A new breed of businesses are starting to change commerce. I call them Artisan organisations and they will be the ‘green shoots’ that will kick-start local business, employment and manufacturing. Who are they? They’re Milkbar, Racer Rosa, Foffa Bikes, Howies, Joe & The Juice, SeaSalt and Huit Denim to name a few. These businesses have been built on a genuine passion to deliver beautiful, memorable products and experiences without exception; they use the best materials; employ artisans that see the beauty in what they produce, and maintain common ethics. The Artisan’s goals are the business’s goals and vice versa. You’ll never meet a person that doesn’t know what they’re talking about or encounter a truly horrific customer experience because everybody loves what they’re doing.

If you care about something enough, go and work for a company that shares your interest or concern. Better still, set the company up yourself. You’ll get the job because you care and your company – with some graft – will succeed for the same reasons. My thoughts are heavily influenced by David Heaitt and Steve Jobs; however, when you start looking around and notice the people that are winning, you realise that they were right.

Photo by Andreas Gursky

via mobile advantage

The alternatives to Nike+ are ugly looking, expensive devices that are produced for more serious runners. Nike has closed a gap in the market by providing the casual runner a utility that integrates into a device that’s as everyday as an iPhone or MP3 player. Information is delivered via a clean and intuitive UI that logs progress over time; put simply it is that basic functionality that runners need the most.

What I find the most interesting is how Nike+ has turned into a social utility: my friends and I can now share our running data and monitor each others progress through a web application. Twitter and Facebook integration have also been considered and this allows your running data to permeate throughout your social networks.

What’s next I wonder? Last.Fm or Spotify integration? My Mac already scrobbles my running music each time I dock my iPhone, it would be great to see a partnership with the one of the lead online music services.

From a sales perspective Nike+ is a cash cow and this is due to the product lock-in: I will forever be buying iPhones and Nike trainers because they now make my life easier and they both work well together. The utility has clearly increased demand for their line of running products and since the launch of Nike+, in mid 2006, demand for it and its associated products has overtaken generic interest in “nike running shoes”:

I’m on the hunt for more things like Nike+. Talk to me if you hear or see anything.

The big consultancy firms steer some of the largest brands and businesses in the world. As the blogs of Ad-World celebrities now indicate, “businesses now need ideas and not just advertising”.

Ideas such as more cost efficient products, services, and after sales services, which go above the norm to provide genuine consumer help and not just up sell requests?

The consultancy firms seem to be the best people to facilitate and recommended real business changes, changes that deliver real value to people, the economy, their own brands and their clients businesses.

Whilst there is talk in the press of bonuses being rolled over, staff cut backs and recruitment initiatives being halted, shouldn’t now be the time that management consultants get truly excited?

The best case studies will come out of this recession and now should be a time for management consultants, the people guiding some of the largest organisations on the planet, to make real business and economic change.

Ad agencies and the marketing industry are now slowly warming to communications initiatives, which are geared to generate “engagement” and “conversations”. This may be a job only half done in many cases, it is not just marketing that needs to change. Changes to business operations, product development and enterprise workforce management need to be made likewise.

Just an excellent speech from Gary V. Nuff said, just watch it!