It costs an American business $.48 to produce a dollar’s worth of goods.
This $.48 figure is known as the raw-cost index or RCI, and comes from an exhaustive 2008 study by the Manufacturers Alliance (MAPI) and the Manufacturing Institute, which is funded by the National Association of Manufacturers.
If the RCI is accurate, then in theory, a business profits by $.52 per dollar—which we know very well is untrue. A business is lucky if it does not spend more than a dollar to produce a dollar’s worth of goods. In reality, that $.48 represents only the costs a company can’t control, like taxes; the other $.52 go to variable costs over which it does have some control, like inventory and labor.
Given the current global economic conditions, there are countless companies actively trying to reduce their variable costs, not just to be more competitive, but for their long term survival.
There are two, distinct industry practices that target that $.52: Lean and Wireless.
The term “Lean” broadly refers to systems and tools (such as 5S, kanban, JIT and kaizen) that, as the Lean Learning Center describes,“[give] people at all levels of the organization the skills and a shared way of thinking to systematically drive out waste through designing and improving work of activities, connections, and flows.”
"Wireless" encompasses two broad classes of technology, being Wireless Communication (smart phones, cellular phones, PDAs, and wireless computers), and Tactical Wireless (radio frequency identification [RFID], real-time location systems [RTLS], global positioning systems [GPS], remote sensors, etc.).
Lean is a proven methodology, Wireless an increasingly proven set of technology tools. The two combined offer an even stronger value proposition than either practice offers alone, and that value proposition targets the costs of doing business.
It is our belief that now, in the throes of a recession/depression/downturn, is the time to fuse Lean and Wireless; and for the Lean and Wireless camps to actively cooperate.
About a year ago, we started writing a first of its kind book titled, THIN AIR -
How Wireless technology fulfills the Lean mission, and are now only a few weeks away from completion. Thin Air dares to propose a new methodology, being “rules before tools,” and to foster partnership between the Lean and Wireless camps, we have also just completed a major upgrade to our web site that offers additional information not included in the book and provides a listing of best-in-class Lean Wireless products as well as a directory of suppliers. Most importantly, we have put in place the foundation for a professional community to learn, network, communicate, and partner with one another.
Not matter what your background is: Wireless, Lean, or you are new to these terms, we sincerely hope that you find the information here to be beneficial to you and your business.
It costs an American business $.48 to produce a dollar’s worth of goods. 