Manufacturing health check

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.

About strategyaudit

StrategyAudit is a boutique strategy and marketing consultancy concentrating on the challenges of the medium sized manufacturing businesses that make up the backbone of our economy. The particular focus is on their strategic and marketing development. as well as the business and operational efficiency improvements necessary for day to day commercial survival. We not only give advice, we go down "into the weeds" to ensure and enable implementation.
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