LO and Big Layoffs LO5672

John Zavacki (jzavacki@epix.net)
Fri, 16 Feb 1996 05:47:33 -0500

Replying to LO5592 --

Wollfgang wrote:
> Michael McMaster wrote:
> He asks, "What about mature industries?" Can the not renew or=20
> transform?

>>>>>>very big smip>>>>>>>>

> But the more important point is that the belief in 'ecomomies of scale'
> is part of the paradigm or shared beliefings, and therefore hard to
> change. But the error was not that for the classical steel mill
> 'ecomomies of scale' are not important (they still are, I think). The
> error was that the people who run such a mill could not imagine that
> mini-mills could be successful, too. All together it is important to
> learn this new knowledge, and change the existing mind-sets.

The notion of economies of scale is a tough one to kill. It keeps
customers waiting for enough orders to come in to make things
"economically." It creates tremendous costs in terms of carrying charges,
wasted space, tied up resources, and more. In the JIT, or demand flow, or
focused factory, flexible cell, agile enterprise, the goal is "economic
order quantity of one", meaning:

reduce waste in all aspects of the business, including purchasing,
maintenance, etc., so that one part can be run as iinexpensively as

John Zavacki
The Wolff Group
900 James Avenue
Scranton, PA 18510
Phone: 717-346-1218	Fax: 717-346-1388

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