RESEARCH TRIANGLE PARK, N.C. – Globalization, outsourcing and offshoring in a flattened world have certainly changed companies. Look out now for “worldsourcing.”
William Amelio, chief executive officer at Lenovo, is pitching the “worldsourcing” concept. Writing in Forbes.com today, Amelio calls the worldsourcing concept “a strategic outgrowth” of globalization and one that Lenovo as well as other companies must embrace.
“Worldsource Or Perish,” reads the headline.
“Worldsourcing is a strategic outgrowth of globalization. In a world with just one time zone ("Now"), business must source materials, innovation, talent, logistics, infrastructure and production wherever they are best available,” he wrote. “And we must sell wherever profitable markets exist, anywhere in the world. In today’s global economy, companies must worldsource or die. It’s that simple.”
However, Amelio is pushing worldsourcing as more than an economic tool. He also sees it as a means to deal with quality and safety, thus improving consumer protection.
Something certainly needs to be done on that front, given the recent recalls of goods made in China ranging from tires to toys and continuing global concern about U.S. beef.
Worldsourcing is “transforming the fundamental structure, operation and culture of business on a global basis,” Amelio said, but he noted that the “phenomenon” is not “clearly understood.”
“Worldsourcing is a bulwark that protects both consumers and manufacturers everywhere. How? Global companies that worldsource their goods and services are exposed to probing light and criticism from demanding customers and government regulators in many countries. They must create trust by adhering to the highest standards of governance, transparency, compliance and quality.”
He noted that Lenovo is a “worldsourced” company. Lenovo’s headquarters are located in Morrisvlle, but Amelio lives in Singapore and most Lenovo employees live in China where the company was launched. Lenovo products are designed and manufactured “across six continents,” he added.
“A meeting of my company’s senior managers looks like the United Nations General Assembly,” Amelio pointed out.
As companies “worldsource,” Amelio pointed out there are “complex consequences.” Just as outsourcing and offshoring have affected workers, so too does worldsourcing.
“Bringing more people into the marketplace extends material comfort to millions who have never known it,” he wrote. “At the same time, it threatens the jobs of people without high-value skills (including many Americans). That is why governments and business must partner to bring education swiftly up to the levels required in the age of globalization.”
Executives also face challenges in making a worldsourced strategy work. Amelio said. For example, “a radically decentralized organizational model” is key to management. Plus, business functions “should be located solely on the basis of finding the most attractive people, skills, proximity to key markets, infrastructure, language proficiency, information technology capabilities, costs and facilities.”
No matter the strategy, however, Amelio warned that quality remains paramount. Worldsourcing is no “panacea” for companies. If they do not produce quality goods, he warned, they “will disappear and deservedly so.”