Radical Cost Reduction and Reinvented Supply Chains

As geopolitical pressures rise, some countries that supply the parts that make up your products may become nonviable.  What if there was a way to reinvent the supply chain and move it to more stable regions?  And what if there was a way to guard against the use of child labor in the parts that make up your product? And what if there was a way to shorten your supply chain so it could respond faster? And what if there was a way to eliminate environmentally irresponsible materials from your supply chain?

Our supply chains source parts from countries that are less than stable because the cost of the parts made in those countries is low.  And child labor can creep into our supply chains because the cost of the parts made with child labor is low.  And our supply chains are long because the countries that make parts with the lowest costs are far away.  And our supply chains use environmentally irresponsible materials because those materials reduce the cost of the parts.

The thing with the supply chains is that the parts themselves govern the manufacturing processes and materials that can be used, they dictate the factories that can be used and they define the cost.  Moving the same old parts to other regions of the world will do little more than increase the price of the parts.  If we want to radically reduce cost and reinvent the supply chain, we’ve got to reinvent the parts.

There are methods that can achieve radical cost reduction and reinvent the supply chain, but they are little known.  The heart of one such method is a functional model that fully describes all functional elements of the system and how they interact.  After the model is complete, there is a straightforward, understandable, agreed-upon definition of how the product functions which the team uses to focus the go-forward design work.  And to help them further, the method provides guidelines and suggestions to prioritize the work.

I think radical cost reduction and more robust supply chains are essential to a company’s future.  And I am confident in the ability of the methods to deliver solid results.  But what I don’t know is: Is the need for radical cost reduction strong enough to cause companies to adopt these methods?

Zen” by g0upil is licensed under CC BY-SA 2.0.

Comments are closed.

Mike Shipulski Mike Shipulski
Subscribe via Email

Enter your email address:

Delivered by FeedBurner

Archives