Ah, the dog days of summer. A break from the office, the cell phone and e-mail offers a chance for some R&R and reflection. So step back from the day-to-day grind and let me be so bold as to offer you a topic to ponder: What exactly is your company's core competence? Is this even the right question to ask anymore? Perhaps more important in today's outsourced world is: What is your supply chain's core competence? And would your answer be the same as your peers across the supply chain?
The idea of core competence is almost 15 years old, yet it resonates today just as it did when C.K. Prahalad and Gary Hamel published their 1990 Harvard Business Review article titled,
"The Core Competence of the Corporation." In a nutshell, core competency is the collective skill set that an organization possesses that enables it to bring to market innovative products. It's the source of a company's competitive advantage.
But as companies outsource more and more, they sometimes dismantle their core competencies, often unknowingly. When they realize what they've done, it may be too late to reverse the damage. So goes the life cycle of an organization.
Since debuting in April, Electronics Supply & Manufacturing has written a number of articles that address the topic of core competence either directly or indirectly. Much of the focus has been on the loss of competence as a result of outsourcing and the efforts companies take to regain it. A few articles in this month's issue touch on this theme too, most notably the cover story by senior editor Crista Souza. Designing for Excellence looks at design for manufacturability and the emergence of companies like Texas Prototypes that specialize in DFM services.
Think about it for a minute. If an OEM outsources its manufacturing, and some design work, along with other functions such as procurement and after-sales service, then over time it will begin to lose the ability to deliver innovative products to its customers.
What's happened is that it has dispersed its core competence to the supply chain. It no longer resides under one roof, but is spread instead across many companies and across many geographies. If the chain doesn't recognize, value and nurture this competence to create competitive advantage, then it's lost.
So I ask the question again: What is your supply chain's core competence?
Bruce Rayner can be reached at firstname.lastname@example.org.