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'You start to ponder': when startling thoughts hit the board, winners and losers hang in the balance.(SUTTON'S LAWS)
LET'S MOVE HEADQUARTERS out of the United States," I told the other directors. "It's the patriotic thing to do."
Those strange comments made more sense after I explained.
The business is an optical instrument company in the Los Angeles area. Five years ago we stopped making the stuff here and switched to Chinese manufacturing. Three things happened:
1. Costs dropped 14%. No surprise there. Usually it's more, but many of the components were already Asian.
2. Quality improved dramatically. Ooh. That was interesting.
3. Turnaround time from order to delivery dropped by half. Wow.
Reducing warranty problems, getting more competitive in pricing, and never being out of stock helped us double sales the following year. Before that, we'd struggled to grow 10% to 20% annually. We doubled again the year after and again the year after that. Stronger cash flow and bigger margins let us hire more engineers and the product just got better and better.
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Source: HighBeam Research, 'You start to ponder': when startling thoughts hit the board, winners...