Customers want more value from you as a supplier. They want it with shorter lead times. They want your innovation in the product, and they don’t want to pay for any of it.

I often hear the declaration, “We can’t reduce costs anymore!” from manufacturers (similar statements come from other businesses), even though they’re players in the real world of not just competition, but also technical development.

When I worked at the Australian automaker Holden, there was a calculation done prior to the launch of the VT Commodore in 1997. The calculation showed that, according to the plant’s average weekly wages, the VT Commodore was cheaper to produce than the first Holden that rolled off the assembly line in 1948.

Think about that for a moment.

With all the extra capability, features, comfort, safety, and reliability that are in the modern car, they are cheaper in relative terms than those that came before them.

I have no doubt this is still true for new cars released today.

Do you think that somewhere along the line, someone in the past also felt they had reached the end of the road in terms of reducing costs and generating refinements?

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