Another story about a US company going against the trend and “on-shoring” to shorten supply times, improve quality and certainty, and gain control over their operations.
Forward thinking companies in developed economies are starting to recognise that manufacturing is a foundation stone of innovation, that manufacturing really matters, despite the decades of being told it does not.
Previously, I have made the point that labor costs alone do not make the case for producing product off-shore, largely in China, and the message seems to be filtering through, as firms start to rethink and bring manufacturing home.
Labor costs are easily measured in the P&L, so can be cut, but time is not measured by traditional accounting, making cutting it a less obvious benefit to many, but if you ask a consumer when they want a product, the answer is usually “now”.
Besides, the bean-counters do not mind inventory, as it is in the books as an asset, not usually measured by cycle time, and the velocity of cash through a business. Not checking item level inventory and cash velocity through a business is like a doctor not taking your blood pressure and heart rate at in a check-up.
StrategyAudit 