The logic of “Re-shoring” is compelling, but it carries inherent risks by reviving the age-old capacity/irrelevant inventory dilemma, especially in the global context of Mass Customisation. Mass Customisation: the conflicting aim of reducing unit costs through more “efficient” traditional mass production, while simultaneously responding to smaller order quantities of ever more customised, diversified demand. The danger lies in getting better at making what isn’t needed while not having enough capacity to make what is needed in the quantities and time-frames required to be competitive. Re-shoring is colliding with Mass Customisation to explode product diversification. The Re-shoring and Mass Customisation phenomena taken together means we can no longer mandate more traditional “efficiency,” making bigger batches of a few of the same things. It means:

  • responding more frequently to smaller customer orders
  • changing over machines more frequently from one product to the next
  • more machine down–time
  • investing in more machine capacity

Manufacturers face critical dilemmas in winning new business while raising productivity to raise wages and create jobs

  • invest in additional capacity and further automation
  • invest additional inventory
  • invest in both
  • wait until they win the business before investing and risk being unable to supply?

Traditional Lean 6-Sigma Solutions Some companies feel “leaned out.” They’ve eliminated waste, albeit creating “islands of excellence” that don’t always connect to the bottom line, hitting “glass ceilings” to continuous improvement. Breaking through Glass Ceilings to superior performance with:

  • smaller run-quantities just large enough to recover the time lost to set-ups that reconcile the inventory/demand dilemma
  • finite capacity planning for finite capacity environments
  • elimination of traditional planning time off-sets of weeks and days, that embed “redundant” inventory into the process
  • lead times reduced to hours or minutes of “touch-time” work content using
  • real-time work signals to manage work being done in real time

The logic of “Re-shoring” is compelling, but it carries inherent risks by worsening the age-old capacity/irrelevant inventory dilemma. Taking the above steps will reconcile this potentially damaging funding dilemma. The cash recovered when the irrelevant inventory Work in-Progress and Finished inventory is sold as product at full market rates, need not be reinvested in inventory! Instead this cash can be invested in growth, innovation, exports, M&As, MBOs and more re-shored business.