Very good article and very ‘TOM appropriate’. I truly enjoyed reading it particularly since now I understand what all that manufacturing terminology means. I also found interesting how the company’s US based manufacturing facilities provide them with insight that can be applied to their global operations. One thing that i would be interested to lear more about is how this 70% domestic value rule is formulated. I would expect that the business model of New Balance is to capitalise on the popularity of the ‘Made in USA’ label and the operational model is structured in such a way as to minimise any domestic manufacturing processes (in particular manual labour) just to scrape by the compliance with the 70% rule. I wonder it I am wrong.
Very interesting article. To me it highlights the disconnect between business and operations models that is created by government sponsored monopolies. Lack of competition creates inefficient operations, while absence of financial responsibility defocuses business strategy and its execution. I have seen very similar symptoms in several state owned companies operating in artificial monopolies around the world.
Good, well researched article. Was very informative to read. This case once again comes to show the importance of having strong and independent internal control mechanisms in trading organisations to ensure adherence of the front line team (operating team) to the business model. The article also shows how forced ranking of employees can motivate people to act outside of standard accounting practices.