Wednesday December 15, 2004 On The Margins
(Masood Mortazavi)
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Wednesday December 15, 2004
[ Economics ]
Why Manufacturing Matters
|
Supply chains are not merely centers of inventory, transportation, delay and fluctuation ("bullwhip") costs that can be unburdened on a contract manufacturer at will, while keeping the "brand" for oneself. Admittedly, the brand represents a highly valuable transaction-specific asset for the guarantees and "insurance" it brings with itself to the products it carries. Supply chains, on the other hand, embody not only costs but also the art of deal making and organization. Doing without them means that one will gradually lose the global deal-making capabilities and skills for the production of stuff, as IBM found out in its ultimate decision to give up its PC division to a manufacturer who had mastered, better than IBM could, the sophisticated art of deal making that lies behind the production of PCs (or anything else for that matter). |
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2004-12-15 16:08:52.0 --
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I work at Sun Microsystems. The opinions expressed here are purely my own, and neither Sun nor any other party necessarily agrees with them.Coordinates
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