Due to globalization, we are competing with economies which offset their lower productivity by paying wages that are far lower than ours. We cannot just say that given our costs in Western countries, we have no choice but to outsource work to China or India. To preserve our industry which is facing tough competition not only for commodity products but also increasingly for cutting edge technology products, we must take action on two fronts:
- Wemust achieve a steep increase in our productivity by eliminating all sources of non value added work. The effectiveness of this approach needs no further proof, since many industries such as the automobile industry have clearly demonstrated it. The road is long and difficult. The current world leader Toyota initiated this approach in 1950, that is to say it took them 57 years to become the world leader and the most profitable automobile manufacturer in the world. Luck had nothing to do with it. It was sheer tenacity. So, do not delay in taking the same route and make sure that you have the means to survive.
- We must create Customer Value so that our products become “must buys” despite their price which is much higher than that of low cost countries.
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