While increasing wages in developing countries and higher transport costs from the factory to market are part of the reason, most are found in Widget Thinking.
The time from when a product came into fashion and then fell out had shortened from seven years to two. It meant companies had to shorten the feedback loop between factory floor and design table.
General Electric is one company reversing the overseas outsourcing trend. It originally had designers in the United States and manufacturers in China. It decided to bring the workers who built washing machines into the same building as the engineers and designers.
Workers on the factory floor identifying any improvements or issues could immediately inform the engineers who could consult with the designers who could modify the Widget. One example was when workers recommended a design change that cut the hours needed to assemble a washing machine from 10 hours to 2.
This 'inherent understanding' (unconscious competence?) of the product had been lost with the outsourcing to cheaper labour in China. GE got it back by closing the gap between assembly line and designer.
Co-located assembly and design also allowed companies to adopt the ‘Lean’ manufacturing techniques popularised by Toyota. Everyone has a say in critiquing and improving the way work gets done, with a focus on eliminating waste. It requires an open, collegial and relentlessly self-critical mind-set among workers and bosses alike –a culture that is hard to create and sustain.
It requires a Leader.
Each worker adds their widget to the Widget moving along the assembly line. It's the job of the manager to make sure that the assembly line is itself assembled so that the work is as easy and efficient as possible. The best way for the manager to achieve this is through an open, collegial and relentlessly self-critical approach.
In the GE example, the dishwasher team created its own assembly line based on its practical experience of assembling dishwashers. The result was that it eliminated 35 percent of labour.
Here's where the bigger SPEAR picture is important to Widget production. The GE workers only shared the information that led to the reduction in labour after management promised them that none would lose their job.
The Leaders and managers had succeeded in creating the Space where the workers felt safe enough to be so innovative that they did put their very jobs at risk.
Every organisation is making something - its Widget. It's probably not literally an assembly line. It is at least made up of people who each makes something that contributes towards the Widget.
Is this process open? Is it collegial? Is it relentlessly self-critical?
Does every worker feel that they have a Leader who has created their Space, defined their Purpose, Equipped them, Affirmed them.?
Then got out of their way?