Point 2 – The New Philosophy

The new philosophy

Adopt the new philosophy. We are in a new economic age, created in Japan. We can no longer live with commonly accepted levels of delays, mistakes, defective materials, and defective workmanship. Transformation of Western management style is necessary to halt the continued decline of business and industry.

Dr. W. Edward Deming

He spoke those words over 30 years ago but how much more true are they to today. Industry is going away from the USA in search of cheap labor, but has it been worth it?

What does management need to do differently to bring manufacturing back? What do we need do do differently with our children so they respect the person working in the factory? What do we need to do differently so people want to work for a company and have pride in what they do?

ISO started out as a European response to the superior quality of Japan and the USA. How do we bring business back on shore? What do we need to create an environment where manufacturing next door to your client is a wise business decision?

We start by looking at the real overall cost instead of chasing the short term profit. Moving off shore to reduce labor cost can be a false economy. Compare not just the labor and overhead savings but:

1. Increased shipping costs, especially expedited costs

2. Loss of control, does the new facility really understand your clients’ expectations? Assume makes an Ass out of U and Me, what is acceptable in one culture is anathema in another. Lead paint is unacceptable in the USA but used on childrens toys in third world countries.

3. Longer lead times. I dare you to get a rush shipment during Chinese New Year for the far east.

4. Putting a competitor in business. I worked with a fortune 100 company on a project. At the time they experienced extreme frustration. They had sent a product to a Chinese company for manufacturing quotation. The next thing they heard came not from the supplier but their customers. The quoting company had gone to their customers and under cut the fortune 100 company’s prices with an identical product, right down to the UL certification number. Everyone agreed it was a sad situation and the fortune 100 company had no recourse.

5. Addressing a dissatisfied customer. How much is in the pipeline when your customer notifies you of a problem? Add in the real cost of creating a gatekeeper while a solution is worked out and clearly communicated.

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