Welcome to “The 17 Percent Solution.” This title is a reference to the Sherlock Holmes novel and film, “The 7 Percent Solution.” It also refers to the 17 percent landed cost advantage that manufactured goods from so-called low-wage countries (LWCs) have over goods manufactured in the U.S. The implication is obvious: It’s going to take prodigious powers of observation and deduction for U.S. manufacturing companies to win in the global economy.
But it can be done. In fact, thousands of small-to-midsized manufacturing companies are doing it every day. Many of them are not only surviving, but thriving, some in areas where winning seemed impossible. American Apparel’s success in the garment business comes to mind.
This blog is for the people who run those companies, or who want to be counted among them. Sometimes I’ll get down into the technical weds of value stream mapping, Pareto charts and other quantitative tools. (An amazing array of software is now available to help.) This is important, because there is room for improvement in almost every company, and productivity is one source of improvement.
But I’ll also discuss other sources of improvement that involve more fundamental strategic decisions about what to make, where to make it, and even how to market it. These decisions are usually more important for closing the 17 percent gap. For example, there are multinational giants who have migrated much of their manufacturing to China and are suddenly vulnerable due to the scandals in toys, pet food toothpaste and more. Moving into one of those areas is a strategic decision that could pay off very well.
The fact is, there are a lot of ways to win in manufacturing besides getting even leaner than you already are. And if you’re winning, it’s my sincere hope that you’ll share the good news here, maybe along with a few tips. At the bottom of this blog there’s a line of type that\ says “You must sign-in or sign-up to comment on this post.” Please click on it now!
It only takes a few seconds to sign up. Once you’ve done that, you’re ready to add value to our community – and a lot more than 17 percent.