A Few Observations

by BILL WADDELL

A curious observation on the Apple article

Kevin covered the New York Times Apple article quite well, so I won't repeat. I had to point out, however, the curious incongruity between the Dow Corning exec who said they had to make the glass in China, rather than in their plant in Kentucky because " We could make the glass here, and then ship it by boat, but that takes 35 days. Or, we could ship it by air, but that’s 10 times as expensive. So we build our glass factories next door to assembly factories, and those are overseas." Makes sense. Somehow that logic has eluded the Chinaphiles at Apple who can't seem to hang a $$$ on the 35 days and, as a result, pay to have that same glass shipped by slow boat back to the USA embedded in their products.

Also, I appreciate Kevin making the disclaimer that he owns the whole Apple line-up. Good idea for us to disclose any personal interest we have in the companies we mention in EE, so I will do the same: I own nothing made by Apple. The thought of sending a nickel earned from my work with lean companies to those guys - even a single iTunes download - is abhorrent to me.

The Outsider, not Insider Trading is Killing Us 

The President forcefully asserted his expectation that Congress pass a bill banning insider trading among the distinguished gentlemen and gentlewomen leading us, and that honored group was only too happy to join him on such lofty moral ground.  We might want to be more concerned about what they are doing right out in the open light of day.

For the last few decades Congress - with rare but total bipartisan support - has passed a stream of bills fueling the housing boom, most notably their near unanimous support for Fannie and Freedy to keep the boom well energized.  They have also been all for deregulating the financial sector, providing tax breaks to oil companies and investing taxpayer money in fostering innovation.  At the same time they went along with an endless stream of regulations and trade agreements crushing manufacturing with an unbearable burden, going along with the theory that it was a thing of the past - better done in China.

Perhaps it is nothing - you can be the judge of that - but this is the wealthiest Congress in history, and where they put the almost $2 billion they have to invest in recent years:

                                                                                                                                                           

A coincidence that they put 93% of their money into the economic activities in which they have a personal stake, and sit idly by while the sectors in which they have no stake go to hell in a hand cart?

The 'All other' includes a hefty chunk of oil & gas, and computer/Internet.

You might want to spend a little time bouncing around OpenSecrets.org, the source of this data.  It is always good to know who bought and paid for your representaives in Washington.

By the way, what group is Barrack Obama's leading financial backer?  Unions? Environmentalists? Not even close.  The correct answer is Wall Street.

 Another Great Article (and not just because they quoted me, although I may be biased)

Inc Magazine published a pieceby Eric Markowitz about the benefits of re-shoring manufacturing, citing a interesting apparel company called American Giant.  Their gig: "At American Giant, we eliminate all the unnecessary layers of traditional selling and marketing: big advertising budgets, fancy retail stores, expensive wholesale partners. That leaves us room to bring American Made craftsmanship to you at a great value, made here. So what’s the downside? We ask you to tolerate purchasing on our website before actually putting your hands on the garment. That’s why we offer free shipping both ways. If you are not 100% satisfied, send your product back and we’ll refund the total price."

In the article, "Exposing the Myths about American Manufacturing", American Giant suggests that it is a matter of time before cloting goes the way of books, videos and music and becomes primarily an Internet based market without the waste and cost of the middle men. They cite Zara (a company we have mentioned often) as a model for the direction retailing is going, and take it a step further.

 Gotta love Margaret Thatcher

It is often difficult to find something new to write about in Evolving Excellence.  The insanity of the Wall Street driven multi-nationals and thei off-shore foibles, success stories among many small and mid-sized domestic manufacturers, nonsense from government that would be humorous if it were not so destructive to so many hard working people ... how many different wasy can we comment on the same things.

And then I came across a great quote from the iron lady: "Of course it's the same old story. Truth usually is the same old story."

Original: http://idatix.com/manufacturing-leadership/a-few-observations/

Comments

[Paul Todd]

As a refugee of the US apparel industry I really hope American Giant does well, but I suspect they need your giudance on Lean Accounting. The basic Lands' End sweatshirt is $22 and the top of the line model is $40. The American Giant version is $59.

[John Hunter]

I now own one Apple device - a Mac Air, it is great. I really prefer Ubuntu operating system to Mac or Windows though.

I can understand not wanting to support Apple - though I also own Apple stock, so I think you should change your mind :-P Do you really find the other computer and phone providers that much better? I did buy desktops "manufactured" in the USA - of course that mainly was just slapping together a few parts imported from Asia.