Posted on 02/27/2006 8:46:18 AM PST by VoodooEconomics
An old boss of mine was fond of saying, "There are few things in life more tragic than to see your beautiful theories murdered by a gang of brutal facts," usually when I approached him with a hare brained idea about turning one of our manufacturing systems inside out. It seems to me that if the national and global thinkers would take their grand economic theories about service economies and knowledge economies and the global marketplace out into the communities where Americans actually live and work, the carnage they would see from having their grandiose theories slaughtered left and right by the brutal facts of American life would be shocking.
(Excerpt) Read more at superfactory.typepad.com ...
Lean is always better, by construction, over slack (as long as demand is stable). Doesn't take an economist to figure that out.
You only want slack in the system to handle emergencies and cases of unforseen spurts in demand. Outsourcing originally evolved to handle excess demand, and then encroached into regular demand satifsaction as well coz it seemed to offer superior value from a cost per unit perspective.
Agree outsourcing was for 'slack' but might add that if you are competing only on price then outsourcing is unavoidable.. if you are competing on other dimensions as well - outsourcing manufacturing could mean outsourcing a vital resource for innovation
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