Vice City Ad of the Day

What makes a real American? A cowboy hat? Enjoying a fine T-bone
steak? Going to a baseball game? Shooting a gun? Maybe it�s the freedom to go
into a poor country and tell them how to do things?! Heh! Those are all great
qualities! But one thing that makes a true patriot is the ability to choose
an American car! When you buy an import you take a hot meal off a hard
working American�s table. (Baby cries) There, there! This poor girl is going
to starve to death, just because you bought a cheaper, more efficient
Maibazu. Without gross symbols of excess, what will Americans have to look up
to? Our great industries is a threaten! Cars, pornography, armaments! And
they need your help! So the next time you buy a car, a piece of adult
literature or a missile defense system! Make sure you do the American thing!

Link:

Dillard's Supply Chain Case Study:

Similarly, the system was good for setting broad parameters for product groupings such as cosmetics, perfume and shoes, but it was extremely labor-intensive to set replenishment parameters for an individual product. In the high-end retail business, where purchases often are emotional, that’s a definite disadvantage. Unlike selling boxes of Tide detergent, selling high-profit items like perfume and jewelry is a science. Walls says experience has shown, for example, that when women shop for expensive perfume like Christian Dior’s J’Adore, they are more likely to make the purchase when there are five or six bottles on the shelf. If there is only one bottle left, they’ll often take a pass.

“I can’t explain it, I just know that it’s a fact,” she says. “It’s the same with products like towels–nobody buys just one towel, they’ll buy at least two. And they’ll likely buy hand towels at the same time. Having the right quantities of products is a key factor to success in this business.”

Link

Ever since I read
In Sam We Trust: The Untold Story of Sam Walton and Wal-Mart, the World’s Most Powerful Retailer
, I’ve been fascinated with supply-chain systems. Keeping shelves stocked with enough products seems to be one of the biggestchallenges in large-scale retail; I’d always thought the economics notion of not being able to meet demand (resulting in empty shelves) seemed like a false problem–if you’re selling out all of your stock, my thinking went, you must be doing great–but, clearly, it’s a huge issue. More interestingly, as the above excerpt explains, it’s not only keeping shelves stocked, but stocked in the right way per product.

Licensing Model for Oursourcing:

With software development, some experts have estimated that development represents only 30 percent of the lifetime cost of an application. If you build an application and the cost of development is $1,000,000, plan on adding another $2,000,000 or more on top of that over the lifetime of the application.

That is, once you’re done coding up a product, there’s still quite a bit of time and money needed to support it and fix bugs. This leaves penny-pinching execs thinking, “how can I shift that $2 million out of the company?” (‘Cause Lord knows that tech-companies should be doing as little actual tech work as possible, just like the Romans and their military before the fall of Rome, right? More women and wine, less computers and compilers. Whao! Pardon the major side-sneer, dear readers.)

Instead of a company outsourcing just the production of a product, we get the idea of outsourcing the entire life of the product to another company: the outsourcing company builds the product, supports the product, and then fixes bugs found in the product. These tasks are licensed out the outsourcing company. Pretty smart, on the face of it: the company no longer has to get it’s hands dirty with anything except signing contracts and checks.

For the outsourcers, this is great: it’s how Microsoft made piles of cash, and established itself, by licensed out DOS to IBM in the 80’s, and then being able to license out DOS to the PC clones. Despite the on-the-face-of-it wins above, I’m not really sure what the long-term benefit to companies hiring the outsources is, however. More than likely, the licenses would be exclusive (avoiding the mistake, some would say, that IBM made), limiting the ability of the outsourcing company to make money off the software by selling it to other companies.

However, even though the IP may be legally owned, via the exclusive licenses, by the company, it seems that in the long-term, the outsourcing company gains the edge: they gain the experience of not only creating, but supporting, and maintaining software. Essentially this means that the skills and know how of software development moves out of the original company. When those skills are lacking in a company whose bottom line depends on the successful application of those skills, a high-chance of “clueless” leadership can sneak in.

That’s a lot of wild, coffee fueled speculation, not unlike most outsourcing yammer. I’ve gotten pretty irritated with the whole outsourcing conversation going on in the tech-world now-a-days (either I’m super obssesed with it, which I am, and/or there’s more articles being written about it) because of the lack of comparisons to other industries’ history with oursourcing. For example, the apparel industry outsourcing just about all it’s manufacturing. Indeed, just about anything that’s manufactured is made in China or ather Asian country.

Now, I’m not saying that the way that outsourcing, as it exists today, in these other industries is what I’m interested in: though I often find the arguments awfully ad hominem, I can agree that outsourcing sneaker manufacturing is quite different than outsourcing computer application development. Rather, I’m interested the arguments and discussions that were going on in these other industries when outsourcing was first being planned for and applied. I’m sure many of the same arguments were being made — off-shore workers will produce lower quality work, it will be too difficult to work with people in other timezones and cultures, etc. on the American side, and the exact opposite on the outsourcing side — and I’d like to see how those arguments and theories panned out into the out-sourcing world of today.

I have a feeling that, as with most reactionary thinking, things aren’t as exactly as we think they are: most people can’t resist reacting to their fear that the future is going to fuck them over, instead of focusing on how to plan for and make their future successful.

That said, to clear up any ambigiousness of mine on the topic, I sure as hell don’t like off-shore development (which I equate to “outsourcing”): as an American coder, off-shoring means me getting fired from a job that I love doing. Thus, as I was commenting a few days ago, I see out-sources as people who want to destroy me, and there’s nothing for me to like about that. Maybe some day I’ll have to suck it up and do the old “if you can’t beat ’em, join ’em” thing. If — well, maybe it’s more “when” — that day comes, I’ll bring my own fork and knife for all the crow eatin’: a little vermin eatin’ never hurt no one, ‘specially a fine Southern Gent like myself.

But, like I said maybe this is all just irrational fear that’ll turn out to be no big deal.

From Proudly Serving My Corporate Masters:

I once had a dream where I had an approved checkin I was trying to make to the NT source control server, and I kept running around to different offices trying to do it, but at each office there was some reason why I couldn’t do it — one machine was broken, another was being used, the third couldn’t connect to the source control server, and so on. What is amazing is that I had this classic anxiety dream not about finding or fixing some particularly heinous bug, but about checking in the fix — a sad testimony to the counterproductiveness of the way the process was constituted. NT management was essentially saying, “Yes, we are paying you a high-five-or-low-six-figure salary to write code for us, but we don’t trust you to decide if your code should be checked in or not.” This led to a typical case of lack of trust causing loss of confidence, with the result that many NT developers lacked the experience to make good decisions about whether fixes should be checked in. The environment became one of developers against management, with developers trying to sneak in as much as they could and management trying to keep things out. The attitude from above was, “If you don’t like the rules, don’t write code with bugs in it, “which was an absurd simplification of the debugging cycle. All we developers wanted was the benefit of the doubt, to be considered innocent of build-breaking until proven guilty.

I’m about 2/3 through Adam Barr’s memoir of his years as a programmer at Microsoft. There are many interesting passages like the above. Mostly, it’s just fun to read about the work-life of a programmer, esp. from the early 90’s before the Internet craze hit. For example, there’s much discusion about the early days of the Video Toaster and the Play spin-off.

IBM and Outsourcing

“Increased global trade was supposed to lead to better jobs and higher standards of living,” said Donald A. Manzullo, an Illinois Republican who is the committee chairman. “The assumption was that while lower-skilled jobs would be done elsewhere, it would allow Americans to focus on higher-skilled, higher-paying opportunities. But what do you tell the Ph.D., or professional engineer, or architect, or accountant, or computer scientist to do next? Where do you tell them to go?”

And, from a related article,

Stephenson’s “bricklayer” scenario might therefore turn out to be optimistic, in that his narrator lists software as one of the four industries in which the United States will retain an edge on its overseas competitors for at least the next several decades. The other three are music, movies and high-speed pizza delivery. I wonder if software is going to be on the real world’s list of U.S. leadership areas by the time we’ve caught up to the “Snow Crash” time frame. Between getting it written cheaply in India and being forced to practically give it away in China, I have to wonder where the business expects to find its revenue growth over the next several decades.

If you can’t make money on the bulk goods, it’s essential to retain an edge in the high-value specialties. For example, Japan moved into stainless steels and luxury cars when South Korea challenged its position in commodity markets. U.S. software companies aren’t doing that, however. I’m surprised to see Microsoft and IBM, both of which are aggressive producers and stewards of intellectual property, being so quick to let it take up residence overseas. Microsoft’s Beijing laboratory has become a world leader in computer graphics research, while much of IBM’s user interface research has moved to its China lab.

Which plays at the question, “how long ’till the American companies themselves are outsourced?” That is, if there’s enough programmers overseas to do outsourcing, why not just make the companies non-American, and move them whole-hog off-shore. There’s really no reason — other than people-networking, getting capital, and legal (I’d guess) — that management can’t be moved off-shores to.

More importantly, if you’re an Indian/Russian/Chinese etc. businessman/woman, or a government, you’re probably thinking right now, “why don’t I just start my own company that makes products instead of working on American company’s products?”