U.S. Cities Capture More Supply Chain Talent

As noted in today's news section, onshoring is gaining favor with supply chain managers who are risk averse.

Researchers say that even if companies are using offshore centers, the U.S. is an essential part of almost any service delivery network for American companies, particularly when the work is complicated, knowledge-based, or requires a high level of communication with customers and internal clients, or when fast turnaround or extensive collaboration is a critical element.

“U.S. centers are also ideal for transforming, improving, and standardizing processes, before they are moved elsewhere,” says The Hackett Group Principal and Global Finance Executive Advisory Practice Leader Jim O'Connor.

At Verizon, a variety of options were considered before the company decided to consolidate nearly 1,500 finance operations staff from more than 300 U.S. locations into two service centers located in Lake Mary, Florida (near Orlando) and Tulsa, Oklahoma.

“By keeping our finance operations in the U.S., we've derived an array of benefits,” says Karan Mehra, Verizon’s director of corporate-finance restructuring. “Talent was perhaps our primary deciding factor. We wanted to make sure we could recruit the quality talent that we needed, and that we could put strong training and development in place. Our goal was to build bench strength to support succession plans, so that our staff had the ability to learn new skills and develop professionally.

“We also saw a wide range of other benefits,” says Mehra. “By staying domestic, we got instant buy-in from both our clients within Verizon and throughout the finance organization itself. We have also been able to maintain complete control over our finance operations and processes, which can be difficult to do when you move offshore. And finally, avoiding extended travel times when visiting our service centers has been a significant advantage.”

In its U.S. research, The Hackett Group used the same analysis technique it relied on to evaluate locations in more than 40 countries for its recent Global Location Guide Book of Numbers Research entitled “Optimizing Decisions on Business Services Locations.”

The Hackett Group analyzed the business environment in various geographies globally based on more than 30 key indicators. Five principal dimensions were weighted and taken into consideration in calculating the attractiveness of various locations. Economic considerations, including cost of labor, office space, were a primary concern. Workforce makeup, including availability, quality, labor laws, and languages, were a secondary factor.

Availability of both office infrastructure and other elements such as electrical supply and airports was considered. Overall risk was examined, including the risks of corruption and fraud, political instability, data and intellectual property theft, foreign exchange fluctuation, the potential for natural disasters, and the quality of the judicial system.

Finally, the quality of the business environment was considered, including the general economic climate, level of political freedom, and overall quality of life.

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