Module 3

Like outsourcing, offshoring is another way for corporations make cheaper products by moving processes to another country. But unlike outsourcing, offshoring moves entire factories to distant countries, not just the customer service department or taxing services. Larger corporations with multiple factories can ship the wok from one factory to another country and save money in both labor and material costs. Friedman claims that offshoring does not take money away from the original manufacturing country by feeding the saving back into the corporation, and in turn, feeds money back into the economy. This theory sounds feasible, but in reality, the money is going to stay within the corporation or make CEO pockets fatter. The employees that were working in the factory that was moved to another country are the people that would be feeding money back into the economy. Instead, they are now unemployed. Also, I am confused as to how offshoring plays into technological advancements. It seems to me that offshoring is a by product of China joining the WTO, and there was no reference to the internet or use of computers.

            The supply chain for a business is the group of processes that gets product from the supplier to the customer. Wal-Mart’s supply chain includes buying product from the supplier, sorting product at the distribution center, shipping product to individual stores, stocking the shelves, customer purchases, and reordering product. Wal-Mart has made this system more effective by upgrading their cash registers to supply instant information about the items a customer purchased. This information is sent directly to the supplier and provides details such as how many items were purchased and in what color. The supplier can then produce only the items that the stores are selling. This allows Wal-Mart to carry less inventory and decreases the chance of over stocking. Unlike the chapter discussing offshoring, Friedman explains how Wal-Mart has used advances in technology to share pertinent information with its’ suppliers. Technology aside, I was amazed at how Wal-Mart was able to become a retailer powerhouse by saving 1% here and 2% there. Owning your own distribution center would help keep costs down, as long as there are enough stores and product to offset the overhead of such a large operation. Wal-Mart took and gamble and it worked.

            In a few short years, Google changed the way people searched for and found information on the internet. Instead of typing in a keyword and hoping for the best, Google developed mathematical formulas that provided the user with the most relevant information based on the entered keyword. Google then took it a step further and provided business the opportunity to advertise online. Now, when you search for an item or idea through Google, you will also be provided information about business that specialize in the searched item. Google can also provide listings for business in your local area by using your IP address. This has help business to target only those who are interested in their services. Business can now spend less money on TV, radio and paper ads, and place more focus on online advertisement through Google. This service has not only helped local business, but those half a world away by providing the customer with information that that be easily accessed through Google.