To: Xpiderman who wrote (25992 ) 11/15/1997 11:22:00 PM From: Bill Jackson Respond to
Xy; The build to order certainly trims costs, and allows for efficient production. Most oriental production lines have been build to order for 30 years. That is one reason for the Japanese electronic success. If they got an order for 100,000 VCRs and the payment (cash or L/C) they would make 100,000 and ship them. North American producers started the problem of surplus with multi tiered distribution schemes. Even now parts for PCs are caught in that trap. I used to make 286 motherboards from the board up. After a while I could buy the entire finished board from Taiwan for less than the cost of the Intel chip set from distibution. After a while I found that the disty chain was doubling the price on me. This effect has forced many American makers out of business. In Taiwan they would form a buyers group and buy direct from Intel Taiwan. Now fast ship and fast make ro order are forcing a collapse on that scheme. Oriental parts makers have eaten the lunches of many USA distys and forced them to be amenable to lower prices. This has resulted in lower prices and less stocking of parts so lead times on many passives have gone up dramatically.(when they made 50% profit they would keep stock on hand).
