Sunday, December 4, 2011

The Solution Cannot be Found Across the Pond

The Capital One commercials with "Peggy" giving customers fits always struck home with me.  Maybe because they're so honest.  For years businesses have been jumping off the Made in the U.S.A. cliff like so many lemmings, looking to test the choppy waters overseas.

Now the lemmings are turning into rock climbers.  They're coming back to the US.

Admittedly, they're trickling back in, but it's a start.  This article, documents a few companies that have made their way back.  The question is why?  The answer almost always gets traced back to the lowest common denominator of cost accounting.  Per unit cost.  For entirely too long we looked at consumers' values as equivalent to cost.  That was a mistake.  Turns out consumers value...well, value, and only in a cynic's world is value fully defined by cost.  Consumers want something that does what it's supposed to, lasts as long as they expect it to, and costs what they think it should cost.  Oh, and they want it NOW.  So the companies that went overseas managed to get about 1/4th of it right.  Even with the curve, that's not gonna get ya a pass.

Bringing business back home can give a business a leg up in EVERY factor customers value.  Lean isn't just a word to be ignored.  American factories are light years ahead in implementing lean, and those that understand lean isn't just an operations sided philosophy are finding it's an excellent cost cutter.  How about quality?  The aptitude and capability of American workers and facilities is far far ahead of their Chinese counterparts.  Oh, and what about getting me that set of steak knives now?  You don't wait 3 months for a product made in the USA to reach you on the slow boat.  You don't wait even longer so the factory can make enormous, gargantuan, truly astronomical batches to cut per unit cost to help compensate for issues in quality and expense of shipping.  The ability of American companies to slash lead times might be their biggest advantage of all, and it might just be enough to help those lemmings back up the cliff.

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