Lean Principles | Overview of Lean Principles |
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Page 10 of 10 Some Historical and Current ContextDecades of commercial war between global car and electronics manufacturers has left the world of production and manufacturing profoundly changed. The early paradigm change that was implicit within the Toyota Management System and used to such a great effect to steal market share from Detroit and denude the American steel manufacturing industry is now a matter of record.Currently, a combination of unrealistic currency valuations across Europe and in the United States and the laggard status of production management technology in many Western countries are driving a disorderly segment retreat from the business of production, manufacturing and service provision across the Western world. To be sure, the move to 'outsource' (retreat from) manufacturing and production under the weight of uncompetitive labour input costs (due largely to overpriced currencies and trade protection measures) and poor management technology is putting extra dollars on the bottom lines of Western Corporations. These corporations are replacing expensive labour and capital inputs with cheaper labour and capital inputs from China and other industrious nations. Isn't this the essence of the initial 'jobless' recovery in the USA where growth in the output of the economy occurs without any apparent increase in permanent domestic jobs? Today, countries like China and India are cheaper manufacturers in a huge range of common goods. Tomorrow, Chinese and Indian companies will be knocking at the door to distribute these goods in Western markets. New brands will emerge. Existing brands will change hands. These brands will find domestic consumer credibility based on real price and quality differences. These challengers will look to add to their bottom lines, the financial value associated with Sales, Storage, Distribution and Service. Then they will seek the value associated with Innovation and the supply chain leverage derived from larger market share. The Japanese trail blazed this approach with great success. Ultimately, they often produced better and more reliable products more cheaply while offering more options and superior customer service. Remember however, for a long period in the fifties and sixties their product was viewed as low quality junk. You have to be around fifty years old to remember that there was a time when imported Japanese manufactured product was accurately classed as inferior rubbish. China has moved through this phase at the speed of light. The view that yielding the manufacturing segment to foreign competitors as product become 'commoditised' is somehow indefinitely sustainable, is predicated on the belief that somehow Western Corporations and Governments will always maintain a superior capability in innovation and new technology. There is plenty of evidence to suggest that this historical edge in product and technological innovation is eroding in the West. This inner keep is under siege. |