The competition between manufacturers in high-wage and low-wage countries typically manifests itself as a two-dimensional problem, opposing production efficiency and planning efficiency.
In each case there are divergent approaches. With respect to production efficiency, low-wage countries tend to focus exclusively on economies of scale, whereas high-wage countries are obliged to seek a balanced equilibrium between scale and scope, in other words being able to satisfy customer requirements in respect of a particular product while at the same time attaining a minimum production volume.
A similar divergence is evident with respect to the second factor, that of planning efficiency. Manufacturers in high-wage countries aim to continuously optimize their processes, using correspondingly sophisticated, capital-intensive planning methods and instruments, and technologically superior production systems. In low-wage countries, by contrast, production needs are better served by simple, robust, supply- chain-oriented processes.
In order to maintain a sustainable competitive advantage for production sites in high-wage countries, it is no longer sufficient to aim for a better position that maximizes economies of scale and scope or reconciles the opposing extremes of a planning- oriented and a value-oriented approach. Instead, the goal of research must be to cancel out these opposite poles as far as possible. Ways must be found to allow a greater variability of products while at the same time being able to manufacture them at cost levels equivalent to mass production. This calls for value-optimized supply chains suited to each product, without excessive planning overheads that would compromise their cost-effectiveness.
Tomorrow’s production technology therefore requires a thoroughly new understanding of these elementary, interrelated factors.