This website covers topics on knowledge management, personal effectiveness, theory of constraints, amongst other topics. Opinions expressed here are strictly those of the owner, Jack Vinson, and those of the commenters.

All about the policies, really?

The Wall Street Journal has a piece on How to Revitalize U.S. Manufacturing.  Unfortunately, it is centered entirely around governmental policies and regulation to shift more and more manufacturing* to be done domestically, instead of importing goods from elsewhere.  (This same applies to any country or region concerned about their manufacturing base.) 

Why do companies shift manufacturing to other locales?  As the article acknowledges, the biggest factor has to do with cost - often the cost-per-part, instead of the total cost (additional shipping costs, additional inventory costs, etc.)  

But why? Why can't manufacturers in the U.S. produce goods more effectively, so that the cost logic doesn't force their hand? We have plenty of intelligent people who have studied industrial engineering or who use Theory of Constraints and Lean and other approaches.  We must be able to produce the same goods with the same raw materials - so the cost equation has to relate to the overall operating expenses and inventory required to make that happen.  

* The article focuses on manufacturing, but I see the same logic used when off-shoring services too.

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