The fashionable approach to supply chain management is to outsource anything that is not a core competency.
Key points:
- Obviously, no one ever wants to focus on something at which they are incompetent
- There is the inherent assumption that the company to which you outsource is more competent than you. Frankly, this is not always the case – but more on this in a later column
One of the most successful companies out there – Amazon – continues to push into new areas and make their core competencies. Their latest foray is offering package delivery to other companies. To compete with FedEx and UPS, they are aggressively eliminating some accessorial charges to win shares.
Some quick hits
- Walmart truck-driver recruiting carrot: $87,500 and 21 vacation days
- Around 66% of diesel fuel is used “on-highway,” which generally means trucks. Railroads and farmers combined contribute another 10% of consumption. So the attached diesel fuel futures prices are pretty representative of the projected future of the pre-tax cost of on-road fuel