Your Customers – Your Biggest Ally

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
•    Higher risk of disruption from political issues
•    Greater forecast error, due to a longer forecast horizon
•    Higher finished goods inventories
•    And on and on

The only good thing that's happened is lower product cost and in many cases is a poor trade off.

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.

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.