Global Sourcing in Croatia

I'm tired of this line, but I'll use it anyway. As the world become flatter supply chains are expanding to all parts of the world to leverage the best talent and skills, not to mention government incentives and access to emerging economies. This week I just happened to meet up with an employee of the World Bank Group's European Investor Outreach Program. She is responsible for getting corporations to look at Croatia as a place to open up shop, with call centers or software development labs.
After a 30 minute conversation I knew plenty about Croatia and why companies such as Siemens and Ericsson established locations there years ago. When I asked her why more companies haven't looked at Croatia she gave me several reasons, but they could be summarized in one word education. Outside of the region Croatia is still viewed as a war torn country, when in fact locally its becoming a major tourist destination. Many outside of the region don't realize that the war has been over for 10 years. With access to the water logistics challenges are minimized and the universities are churning out a lot of computer science talent. So maybe what this country needs is a catchy slogan like, "The War is over. Time to Love Croatia."

Made in Austria

So I've been on assignment here in Vienna, Austria for three weeks now and one interesting note is that Austrian use a lot of Austrian products. From commodity products, such as envelopes and pencils to Red Bull beverages, I'm impressed with the use of locally made goods. It sounds strange, but coming from the US it's very foreign (pun intended) for me to use and see so many products products that are made locally.

In other news, I attended an interesting event this morning sponsored by the Economist Intelligence Unit, a division of Economist Magazine. The event was a discussion on the business outlook for Eastern Europe and Russia. While it was a very broad discussion on topics such as local politics, human resources and economics, the supply chain copyrighting occurred more often then I expected. Doing business in this region of the world comes with its own challenges, particularly around logistics and getting your raw materials into the country and your products out of the country. According to Dr. Daniel Thorniely, SVP, economist Intelligence Unit, in many cases this requires joint ventures and acquisitions to get around the customs issues. What he didn't discuss was outsourcing. Why not simply find a trusted partner to outsource the headache of customs and shipping? That would be less costly then a joint venture and certainly easier then acquiring the skills.

New York's Looting of Logistics Providers

The Associated Press beat me to it. I had every intention to write an blog about all of the tickets I see on UPS, FedEx and DHL trucks throughout New York City every day, but my move to Vienna got in the way. So to read the article click here, I felt a little defeated (but to its credit it reaches a much wider audience then my blog, so at least the story is out). The statistics in the article are staggering. "UPS has a fleet of 1,000 trucks and receives about 15,000 tickets a month here. The company is the biggest offender in the city, paying $18.7 million in parking violations for the fiscal year that ended June 30, according to city data. FedEx was second with $8.2 million."

What the article doesn't do is explain what would happen to NYC if these trucks couldn't do what they do - deliver important documents and parcels. From paychecks to legal documents to real estate agreements, New York City would come to a stand still without them, yet the city is determined to slow them down. What I'd like to know is, do the USPS trucks also get fined? Does anyone know? Because that would be government cohesion against industry and provide an unfair advantage.

At the end of the day businesses that use these services will suffer. As the fines get larger the 3PLs are going to simply add a surcharge on all NYC deliveries to cover the overhead. There simply has to be a better way. While I wouldn't want to see the streets clogged with brown trucks, they should be able to deliver a package during a specific window where they don't get fined. While an agreement was made between the City and the companies to reduce the fees out of court (which the City was losing money on) it's still unfair.