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Nov. 2007
In this bulletin:
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YOUR
CUSTOMERS -
Rene Dubos was a French-American microbiologist, environmentalist, humanist, and Pulitzer Prize-winning
author. In an essay
written
shortly before his death, he stated that the willed future always prevails over the logical future. He defined those two
"futures" in this way:
- Logical future - the future that is an extrapolation of existing
trends.
- Willed future - the future that we make different through the use of our human free
will.
This got me wondering about the many companies today who think that they can no longer compete because of
their domestic factories. As a result, they
chase low cost labor and outsource their product overseas. If a company competes on cost only, they're not likely to win. If they can outsource and
get low cost, so can their competition.
In today's new world of global manufacturing, many companies have a distinct advantage: their customers. These customers want the product "their way"
- features, options, style, color, and so forth - and they want it now. They're no longer willing to take the standard product and they
don't want to
wait a long time to get one specially ordered.
If a company outsources its products by end item (SKU), the following bad things happen:
- Longer lead times
- Less responsiveness to shifts in demand
- Less reliability due to transportation delays
- Greater forecast error, because the forecast horizon is longer
- Higher finished goods inventories
- And on and on
The only good thing that's happened is lower product cost. This seems to me to be a poor trade off.
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On the other hand, companies are getting lower cost along with shorter
lead times, lower inventories, and greater responsiveness. They've
learned how
to add variety to their product by finishing it only after receipt of
the customer order - and then shipping it quickly. Using standard
components,
perhaps sourced offshore at low cost, they can do things that simply
can't be done from half a world away. For more on this, click here.
If we exercise our free will and use what we've learned about
Postponement, we can compete here in North America with just about
anyone. We're in the
middle of the best and largest free market in the world - and it's
filled with allies: the customers.
It will require our intellect as well as our free will to capitalize on this opportunity. It's there for the taking.
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International Distributors
In an effort to save our customers money and time, we have established a network of international
distributors in Europe, China and Australia/New Zealand. If you are ordering from outside the United States, we recommend that you contact
them
- click here to see who is
available in
your region.
Also, if you are interested in becoming an international distributor of our products, please contact us
at info@tfwallace.com. We are looking for
distributors in Africa, Canada., Mexico and South America.
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In a somewhat surprising turn of
events, APICS has asked me to join their national Board of Directors.
As one
who has been less than enthusiastic about APICS's performance over the
past dozen years or so, I suppose now I'll actually have to do
something
instead of just complaining.
Truly, I'm honored. To those of you who are APICS members, I promise I will absolutely bust my backside
to
help APICS improve. It will get better, and I'm delighted to be a part of that.
My formal invitation came from Dr. Robert Vokurka, incoming APICS president. I replied with an
acceptance, to
which Robert responded, "We've got great things ahead of us.... thanks for joining us on the ride."
You bet, Robert. And thank you.
And thank you for listening,
Tom Wallace
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