[lbo-talk] Insourcing boom

Chuck Grimes cagrimes42 at gmail.com
Fri Nov 30 16:54:43 PST 2012


"What we had wrong was the idea that anybody can screw together a dishwasher," says Lenzi. "We thought, 'We'll do the engineering, we'll do the marketing, and the manufacturing becomes a black box.' But there is an inherent understanding that moves out when you move the manufacturing out. And you never get it back."

It happens slowly. When you first send the toaster or the water heater to an overseas factory, you know how it's made. You were just making it-yesterday, last month, last quarter. But as products change, as technologies evolve, as years pass, as you change factories to chase lower labor costs, the gap between the people imagining the products and the people making them becomes as wide as the Pacific.

-------------

Watched the entire evolution from the 1980s on in the repair shop. If the assembly takes forever, just imagine the repair and reassembly.

``It was important to have designers, engineers, and assembly-line workers talk to each other then, too. That companies spent the past two decades ignoring those things just shows the power of price, even for people who should be able to take a broader view.''

Yes, but it also illustrated the absurdity of getting an MBA and believing that economics and management were a substitute for concrete experience. In the 1980s there were still old guys in the VP ranks who came up from the shop floor and took that background with them. By the end of the decade, they were gone and these asshole 90 day wonders were getting their jobs. We are paying the price for `a business education' and a whole management ideology that is pretty much total garbage.

``Bowman oversees all manufacturing at Appliance Park. He started there 29 years ago, fresh out of college, as the second-shift foreman on the dishwasher line...''

Yep. And the upper management let him languish for the last fifteen years.

Of course I seriously doubt this is a trend, but here's hoping. The other two jerk-off trades are marketing and finance-investment, both heavily drugged on China. GE is big enough to finance its own developments.

There is another whole sectional component not mentioned which are the foundations of manufacturing which are roughly mining, intermediate production of steel, petrochemicals, and other materials, and energy which was mentioned. And then from above, making the machines that make the machines. China and Germany as far as I can tell, by looking around, are still the premire producers of the upper level of manufacturing for manufacturing.

And of course thanks for the posting...

CG



More information about the lbo-talk mailing list