Making things
I've been thinking about a comment that a client made not too long ago. I was visiting his plant and he asked me if I would like to see the production floor. I love seeing production lines and hadn't seen his in a while so I jumped at the opportunity. We walked down the hallway and through the production room doors. In front of me, to the right was a line with computers and machinery for producing one of their products. On the left for as far as the eye could see were racks of shelves where three other production lines used to be.
"Where are the other lines," I asked him. "They're gone," he said. "That," he added, pointing at the lone line on the right, "is the last line. We are a distribution center now." He looked sad. "We really don't make anything here anymore."
I'm not a pessimist but it seems that we don't make nearly enough stuff anymore. Other countries make things and distribute them here. I have heard and understand the economic theories about intellectual production and the supply of necessary services. After all, I operate in that sector of the economy, but I consider it a bad sign that clients who make things seem to have been hit hardest by the economic downturn.
I think a thriving economic force needs to make things.
"Where are the other lines," I asked him. "They're gone," he said. "That," he added, pointing at the lone line on the right, "is the last line. We are a distribution center now." He looked sad. "We really don't make anything here anymore."
I'm not a pessimist but it seems that we don't make nearly enough stuff anymore. Other countries make things and distribute them here. I have heard and understand the economic theories about intellectual production and the supply of necessary services. After all, I operate in that sector of the economy, but I consider it a bad sign that clients who make things seem to have been hit hardest by the economic downturn.
I think a thriving economic force needs to make things.
First of all, I'm not an economist nor do I play one on TV. But I'd like to take that just one step further if I understand what you're saying...
A thriving "economic force" needs to make a sustainable, consistent income and fair profit in order to thrive and survive.
What we are losing is direct control. You see that in the number of recalls in manufactured goods and even in our food chain form goods produced and grown overseas.
We've turned everything into a commodity and therefore it's value is only in price. One of the problems is - especially in my industry, you constantly push the price down and make it cheaper until it breaks.
And then, having decimated your manufacturing workforce and plants, you have very few choices left.
Just my .01 ....
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Jeff - I agree with you completely. That is a great additional point.
Thanks.
Kurt
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Step number one is live within your means. Zero debt should be your goal.
Achieve that and you can then pick and choose what you buy and from whom-- with American being choice A.
Live outside your means (have lots of debt) and you are forced to Walmart.
Guys -- most of what is sold at Walmart is made someplace else - -that is why it is so cheap. The health care plan in China is: "don't get sick."
I say it again for emphasis -- step one is live within your means.
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The key thing to note was that he looked sad. Why would he look sad? If you had told him 10 years ago that all of the troubles that he was dealing with would soon be gone, it would seem something to celebrate. Fewer employees to manage, less equipment to break, greater profits, etc. would seem to be the goal right?
I have never been a fan of the idea of the service economy. I find it short-sighted and math challenged. That's not saying service is evil. I would say that some service is not really service at all. Service that does not assist in production and delivery is not really service.
Some service is nothing more than helping a company shovel through contrived regulations that have no real purpose. That is evil.
In the case of overseas production, the producers have given away their true value to other companies and converted themselves into a distribution service.
Automation in and of itself is not evil, but when a company hires a company to create and maintain the automation process for them, they've given another part of their value away.
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This fella would have looked sad had you said that 10 years ago. He gets it.
Thanks for your comment, Mark.
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I did a Google search for "service economy lies". If you look at the old posts it really gives some insight. I found a newspaper article from 1985 where economists were warning that it would lead us to where we have arrived.
Maybe we need to to look at what else these prophets were telling us. I wonder if any of them told us how to reverse it?
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