Amazon.com’s competitive advantage over regular retail has typically been around good prices with the thing you are looking for being available. In essence, they are an online, extreme extension of the big box store. The downside has been that if you want it now, you have to either pay extra for expedited shipping, or get [...]
As we approach the end of the calendar year, many companies are starting to work on their Annual Operating Plans Wishes for next year. Why do I say wish? Because all too often these plans dictate what they wish would happen. Throughout the year, performance is “measured” against the plan. Positive variances are rewarded. Negative [...]
Continuing on a supply-chain theme from Doing Outsourcing Right and Don’t Lose How To Make Things, I found this Reuters article carried on MSNBC interesting. Surging China costs forces some U.S. manufacturing companies back home Like a lot of popular press articles, the title and even the lead kind of miss the point. They [...]
In a previous post, “ Don’t Lose How To Make Things,” I discussed some of the perils of outsourcing either your production or your production technology. Yet there are many successful companies that manage to do just that. One of the most successful is Apple. We all know Apple as a cutting-edge innovator. Their products [...]
When doing the financial analysis of “low cost labor” off-shore production or outsourcing, some simple assumptions are often made. One of those assumptions is that a country that has a history of political stability will continue to do so. While those of us in the USA may not be all that aware, Tunisia has been [...]
When improvement teams set up kanban loops, they often get very creative about how they actually operate. What follows is an example of one such loop, and then I am inviting comment and replies to some specific questions I have. The process works like this: The items are stored on a shelf in a [...]
Yesterday’s post on vendor managed inventory touched on a couple of things about “lean” and reducing inventory that I’d like to explore further. All too often “inventory reduction” has been a way to “sell” a lean manufacturing implementation. The reduction of inventory becomes the objective. While this isn’t inherently a bad thing, it is all [...]
Almost every shop I have visited has, or is thinking about, initiating a “vendor managed inventory” program of some kind. The pressure to do this is especially strong when there is a big push to improve working capital positions and increase inventory turns. And, to be honest, the way traditional accounting counts inventory turns, getting [...]
This post on Kevin Meyer’s Evolving Excellence blog brings up some good challenges to the traditional “avoid fixed costs” rationale for outsourcing. The post (and the comments) point out Wall Street’s obsession with achieving a total variable cost model. There is certainly a lot of appeal. Traditional cost accounting works hard to “assign” fixed costs [...]
AP IMPACT: Chinese drywall poses potential risks Although I hate to judge before all the facts are in, it’s beginning to look like a huge set of customers got burned (once again) by quality problems from China. Before I go any further, I have to say that I have spent loads of time in China. [...]
