Concentrating on the essentials

The global economy is becoming increasingly far-reaching and networked. As a result of these changes, companies must overcome many challenges, including massive individualization, time-based competition and new environmental requirements. Lean, flexible companies are the ones best equipped to respond to these demands. They can concentrate on their core skills and simply outsource unimportant jobs. By doing so, they ensure that every activity, every investment and every business unit contributes to added value and increases the benefits of shareholders. At the same time, the number of interrelationships and interfaces among smaller companies is expanding, raising the importance of logistics.

Strengthening core skills through the use of outsourcing

In the past few decades, business-administration academics and managers have come to an important realization. The increasing use of complicated management systems and complex organization units is not considered to be a promising way to approach the challenges posed by the global economy, massive individualization, time-based competition and new environmental demands. The reason is that such systems fuel rapid cost increases, and these costs frequently erode or even surpass the desired gains, e.g., in the form of increased planning and management effort, increased system failures and follow-up costs of system disruptions.
In response to this realization, a trend in which companies concentrate on their core skills has been spreading since the 1990s. The preferred approach is straightforward, lean organizational units that focus on one or a limited number of tasks and manage themselves to the largest possible extent. Those activities that are considered to be outside the realm of core skills are outsourced. As a result of outsourcing, new organizations consisting of smaller, simple and similarly structured modules are created, and these modules can be flexibly linked to one another. In this process, the organizations are converted into high-performance, manageable components of multi-linked value chains, company structures and national economies of the future.

A focus on simple, clear structures

In the world of stock markets and financial-commercial activities, a preference for simple, clear structures has emerged. The thinking here is that every commercial activity, every investment and every business unit should be measured by its contribution to the added value of a product or other outputs in the sense of "shareholder-value thinking Shareholder value ." Stock markets and investors who focus on shareholder-value thinking favor simple company structures, for which services and earnings can be easily and clearly measured, over the complex company and partnership structures of the 1970s and 1980s.
With the return of modular organizational structures among companies, the so-called "loosely coupled systems", the number of interfaces and the importance of coordinating the modules in the value chain become more important. This, too, means a bigger role for logistics.

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