American Manufacturing worker: Help! The villainous CEO who runs my competitor has fired his American employees and moved the jobs offshore! He's made an alliance with a dragon who offers labor for almost nothing. My own company is thinking of doing the same thing because people like me are too expensive. I can't live like a princess on what I'll make in a junk service sector job like retail or fast food! Can anyone save me from the dragon?"
Villain (twirling his mustache): Bwa-ha-ha-ha-ha! I've found this Chinese Dragon whose laborers work for practically nothing! I don't have an engineering background but I have an MBA in finance and I can easily figure out the competitive situation: (1) It costs the kingdom in which the princess works $20 in labor for every hundred widgets, and that's without making any profit. (2) It costs my friend the dragon $1 in labor for every 100 widgets and $6 to ship them across the Pacific Ocean. He also wants a $1 profit so he charges me only $8 per 100 widgets. Heh-heh-heh... it will soon be time for my friend the evil banker to foreclose on the princess' house. Too bad for her but it's a lot cheaper to do business when your employees (or your partner's employees) are slaves instead of princes and princesses! Dragon: That's right, pal. We don't have problems like "fair wages," "employee safety," or "pollution control laws" over here. If a worker falls into unguarded machinery, we just get a new one-- a new worker, I mean. And they don't dare complain or quit either-- heh heh heh. Work with me and we will rule the world together! Dragon (aside): Manufacturing capability is the backbone of military as well as economic power. I remember the lessons of the Korean War, in which my human waves didn't fare too well against American industrialized military power. My own agenda is to destroy the manufacturing capability of the United States while acquiring this capability for myself. In ten or twenty years-- I am a patient dragon and I can wait fifty years if I must-- I will move against Taiwan and the United States will not dare raise a finger to stop me. The capitalists really will sell you the shovels with which to bury them!	"I determined absolutely that never would I join a company in which finance came before the work or in which bankers or financiers had a part. And further that, if there were no way to get started in the kind of business that I thought could be managed in the interest of the public, then I simply would not get started at all. … it is control by finance that breaks up service because it looks to the immediate dollar" (Henry Ford, 1922, My Life and Work).
Villain: Sorry to bother you, Dragon, but these widgets you sent me are out of specification. Dragon: (Suddenly he doesn't speak English.) Villain (aside): Dammit, he spoke perfect English when we made the deal to move my factory to China! Dragon: OK, I'll send you replacement parts. They'll be on the West Coast in only six more weeks! Villain: Oh well, I suppose I can't run a just-in-time operation when the Pacific Ocean adds more than a month to my lead time.	"What was that? We must have a bad connection here. Telephone is suddenly very bad!" [BabelFish translation at left]
American Manufacturing Worker: I need a knight to save me from the Chinese dragon! Lean Hussar:  I'm Jerzy Kowalski and this [indicates his sabre] is Mrs. Kowalski.* Now, Mr. Dragon, let's see about your "overwhelming" cheap labor advantage. Dragon (aside): Hmmm, "Jerzy" = "George." That sounds inauspicious but... Dragon (aloud): ...I've beaten heroes on horseback before, like Six Sigma Cowboys and Quality Circle Knights. There is no way they can beat my cheap labor unless they can make their employees work for what my workers get, and that would violate American minimum wage laws! * Readers of Henryk Sienkiewicz's The Deluge will recognize this line as almost obligatory, like "Bond; James Bond," and "Shaken, not stirred."	A 17th century Polish Winged Hussar. The Husaria wore breastplates and lobster-tail helmets, cloaks of leopard or tiger fur, and wooden-framed wings that attached to the breastplate's back. The fur and wings frightened enemy horses that were not accustomed to them, and the wings also defeated the Tartar lasso. The saddle's ergonomic design along with ergonomic riding techniques (posting or rising trot) allowed Polish cavalry to ride up to 70 miles a day, a distance that would normally have killed any horses on earth. Ergonomics was only one of several modern lean manufacturing concepts that was used by Poland's renowned cavalry.
Dragon: NOW you will find out how I stopped the Six Sigma Cowboys and Quality Circle Knights. I just erect my usual competitive barrier, a hedge of pikes that symbolizes my low labor costs... Wait a minute, that lance cannot be long enough to outreach my competitive barrier, no one could possibly carry a twenty-foot lance... [Doink!] YEEEEOWWWWTCH! Lean Hussar: The Polish kopia was designed to outreach infantry pikes, and it's not as heavy as it looks. The center of a cylinder doesn't add much strength but it adds weight, so we just got rid of the weight by making the lance hollow. That's your first lesson in lean; if it doesn't add value, it's waste. I just examined the value stream in the princess' kingdom and I found plenty of waste; it's only a matter of knowing it when you see it.	Six Sigma hasn't done much to stop the Chinese Dragon from taking American jobs. Lean manufacturing was, however, invented a century ago for this express purpose; it was then known as scientific management.
Lean Hussar: Let's start by taking a look at that ball and chain on the princess' leg. It seems that she spends a good part of her day walking to get parts and move her finished product. Mrs. Kowalski can fix that almost as fast as you can say "kaizen blitz." Waste must be cut down on sight! Bij! Zabij!* [A cut from the hussar's szabla severs the chain.] Rearrangement of her workplace means she can produce value instead of walking back and forth to get parts. Now labor costs her kingdom only $10 per hundred widgets. Dragon: All of a sudden, I don't like where this is heading. Villain: How can you lose? You pay your workers fifty cents an hour and the princess earns fifteen dollars. It's simple mathematics; we are invincible! Lean Hussar: Here's what the Grand Hetman [field-marshal] of Lean said about the matter: "The undirected worker spends more of his time walking around for materials and tools than he does in working; he gets small pay because pedestrianism is not a highly paid line" (Henry Ford, 1922, My Life and Work, 80). * "Strike! Kill!" A simple improvement like rearranging the workplace to reduce the need to walk can double or triple productivity: Basset (1919, When the Workmen Help You Manage, p. 71) cites an example in which poor tool arrangement resulted in an estimated 60 percent of labor costs going for "pedestrian endurance." "We found that it often cost us twenty-five cents' worth of a man's time (not counting overhead) to get a thirty-cent tool. With that, we abolished the central tool room— a man cannot be paid high wages for standing around waiting for tools" (Henry Ford, 1926, Today and Tomorrow, 103).	Szabla = Polish sabre, another example of lean thinking (ergonomics): "Their ability to fight for long hours without exhausting themselves stemmed from the fact that their sabre was probably the finest cutting weapon ever in use in a European army. It was the curved eastern sabre, modified by the Hungarians and further adapted by the Poles in the sixteenth century until it reached a combination of length, weight, and curve which gave it an uniquely high ratio of cutting-power to effort expended" (Adam Zamoyski, The Polish Way, 155).
Lean Hussar: Now let's see about the cycle time in the princess' kingdom. Did you know that most workpieces spend 99 percent of their time waiting to have value added to them? We can, by going from batch-and-queue operations to single-unit flow and by starting work only when tooling is ready to accept it, cut our cycle times down considerably. We can cut them down so much, in fact, that we can make to order instead of making to forecast. Our competitor can't do that when it takes his parts four to six weeks to cross the Pacific Ocean. That sounds like a real drag, Mr. Dragon. [The dragon snaps at him but is far too slow because of the cycle time difference, and the Lean Hussar hits him over the head with a czekan.] Dragon: OUCH! Now I don't need a telescope to see stars.	Per Adam Zamoyski's The Polish Way (155): "...the most lethal of which was the czekan, a long steel hammer which could go through heads and helmets like butter."  ==>  "What is the use of putting a tremendous force behind a blunt chisel if a light blow on a sharp chisel will do the work? …For any one to be required to use more force than is absolutely necessary for the job in hand is waste" (Henry Ford, My Life and Work)
Lean Hussar: Now we will apply Mrs. Kowalski to the rest of the waste in the princess' kingdom. With total productive maintenance (TPM) to eliminate unplanned machine downtime, redesign of jobs to eliminate wasted motion, intelligent use of the ISO 14000 environmental standard to make money, design for manufacture (DFM), and similar techniques, we can make the American manufacturing worker so productive that we can raise her pay to $20 an hour while reducing labor costs to $2 per 100 widgets. Villain: No! This cannot be happening! I am invincible! Lean Hussar (deadpan, with foot on dragon): Rule Polonia.	Reduction of labor costs from $20 to $2 per hundred units is easily within the reach of lean manufacturing techniques, as shown by the results achieved by Ford's Highland Park plant.
Villain: Wait a minute, let me look at this cost structure again. It now costs you only $2 in labor for every 100 widgets even though the American worker is getting paid like a princess. I have a fixed cost of $6 per 100 widgets because my dragon has to ship them across the Pacific, and there is no way to get that fixed cost out of my value stream! What can I do now??? American Manufacturing Worker: Your business can die horribly and rot, you bean-counting moron, while my kingdom takes over your market share. Lean Hussar: Maybe Scotty from Star Trek can beam your parts over from China; ha ha ha ha ha! Villain: It's all the dragon's fault; he promised that I would rule the world, or at least my market segment. Fools! I'm surrounded by fools! American Manufacturing worker: You're the fool for relying on cheap labor to do your dirty work, because good-old Yankee know-how can beat cheap labor any day. When you go Chapter 11, it will serve you right for shipping American jobs offshore!	The Pacific Ocean is less of a barrier if the product (like silicon chips) has a sufficiently high price to weight ratio to justify shipment by air, which can reduce the cycle time penalty to one day. Air transportation is not, however, economical for most products. As for "beaming parts over from China," Mexico would a far more dangerous competitor (if it developed substantial manufacturing capability) because it could deliver on a JIT basis. Furthermore, everyone who is enamoured by the "service economy" (don't work in a "dirty" factory or touch any "dirty" machinery) should realize that services can and are delivered by the Internet. Service jobs are routinely outsourced to India and elsewhere.
It looks like the dragon isn't going to have much luck back home, either. Dragon: It's hopeless, I can't compete with lean hussars! Well, I'm out of here. I'm going back to Asia; at least I can rule that part of the world. Japanese Lean Dragon: Bring it on, Bejing Bob. My own sensei [teacher] was Henry Ford, and from him I learned the lean arts of kaizen [continuous improvement], jidoka [autonomation], poka-yoke [error-proofing], muda [waste] elimination, and just-in-time manufacturing! And I think you will find my muda-cutting katana [samurai sword] as sharp as the Lean Hussar's szabla...	The Japanese Lean Dragon has the same problem with trans-Pacific transportation costs, which is why he actually employs American workers in American Honda and Toyota plants.

"We are justly proud of the high wage rates which prevail throughout our country, and jealous of any interference with them by the products of the cheaper labor of other countries. To maintain this condition, to strengthen our control of home markets, and, above all, to broaden our opportunities in foreign markets where we must compete with the products of other industrial nations, we should welcome and encourage every influence tending to increase the efficiency of our productive processes" (ASME Past President Henry Towne, Foreword to Shop Management by Frederick Winslow Taylor, 1911).

"The adoption of scientific methods will make it possible, by reducing the cost of production, for the manufacturer to compete in the open market in the foreign centers of the world on an equal selling basis. The quality of our American output is beyond question, but the necessity of quoting a higher selling price, owing to the high rate of productive labor, has kept the volume of our exports much below its possible figure." (Parkhurst, Frederic A., 1912. Applied Methods of Scientific Management)

"Ford's success has startled the country, almost the world, financially, industrially, mechanically. It exhibits in higher degree than most persons would have thought possible the seemingly contradictory requirements of true efficiency, which are: constant increase of quality, great increase of pay to the workers, repeated reduction in cost to the consumer. And with these appears, as at once cause and effect, an absolutely incredible enlargement of output reaching something like one hundred fold in less than ten years, and an enormous profit to the manufacturer" (Charles Buxton Going, preface to Ford Methods and the Ford Shops by Arnold and Faurote, 1915).

Timothy Aeppel, "Manufacturers Cope With Costs of Strained Global Supply Lines," Wall Street Journal, December 8 2004 page A1 says:

The surge in global trade in recent years has added to strains and charges for all forms of transport.
As a result, some manufacturers are adding costly buffer stocks-- which can mean setting up days' or weeks' worth of extra components-- to avoid shutting down production lines and failing to make timely deliveries. Others are shifting to more-expensive but more-reliable modes of transport, like air freight, which is faster and less prone to delays than ocean shipping."

Note that "adding costly buffer stocks" goes totally against the basic concept of Just-In-Time.

Stung by Soaring Transport Costs, Factories Bring Jobs Home Again

By Timothy Aeppel

Wall Street Journal

The rising cost of shipping everything from industrial-pump parts to lawn-mower batteries to living-room sofas is forcing some manufacturers to bring production back to North America and freeze plans to send even more work overseas.

"My cost of getting a shipping container here from China just keeps going up -- and I don't see any end in sight," says Claude Hayes, president of the retail heating division at DESA LLC. He says that cost has jumped about 15%, to about $5,300, since January and is set to increase again next month to $5,600.