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Challenge to Manufacturing A Proposal for a National Forum. (1988) / Chapter Skim
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Reorganizing Production to Restore Competitiveness
Pages 34-41

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From page 34...
... Cohen and John Zysman, "Manufacturing Innovation and American Industrial Competitiveness," Science, 4 March 1988. ety, and industry designed to change the structure of a nation's comparative advantage in international trade.
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From page 35...
... High-tech intermediate goods such as semiconductors depend on downstream markets for sales, both high-tech computer sales and traditional industrial and consumer electronics markets. As has already happened in the United States, without domestic production in a final market such as consumer electronics, semiconductor makers lose access and then even the ability to manufacture devices for that market located abroad.
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From page 36...
... The Japanese have shown that they can produce and be innovative in a high wage location, much as American producers did 30 years ago, and that their competitive advantage rests on manufacturing innovation. For America the solution to balancing trade accounts while maintaining our wealth and power lies not just in exchange rates and macroeconomic policies, but in something more fundamental to the working of the economy and production.
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From page 37...
... Reduced cycle time creates not marginal pricing advantages, but decisive strategic advantage. Japanese automakers have substantially benefited from their huge advantage in cycle time over their American competitors.
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From page 38...
... It bought time, not for a long-term competitive response, but for the Japanese competitive advantage to cumulate beyond reversal. This strategic debacle affected not only the consumer electronics industry but a broad set of other industries such as semiconductors, which would have been a very different case of industrial history had the Japanese not wrested dominance in consumer electronics, and used it as the key to the mastery of volume production in semiconductors.
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From page 39...
... For American firms this implies layoffs; Japanese firms use a wage system -- lump sum bonus payments -- to adapt. Dynamic flexibility, by contrast, allows firms to increase productivity by improving the production process and change products quickly.
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From page 40...
... We used to produce steel and export steel engineering services; we now import both. In consumer electronics, relocating production offshore meant that American producers lost out on the next generation of products, notably the videocassette recorders and compact disc players.
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Key Terms

  • american firms
  • consumer electronics
  • reorganizing production
  • production offshore
  • japanese firms

  • cycle time
  • volume production
  • flexible production
  • cheap labor
  • direct labor

  • trade deficit
  • labor costs
  • competitive advantage
  • market share
  • john zysman

  • moving production
  • batch production
  • american producers
  • production structure
  • production methods

  • traditional manufacturing
  • production paradigm
  • international trade
  • trade account
  • manufacturing advantage

  • manufacturing innovation
  • machine tools
  • technological advance
  • electronics industry
  • business schools


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