in case you missed this WSJ article. Really interesting about a guy trying to build a shoe business. the problem is that he can't buy small quantitates of finished materials. It really reminds me of the reverse side of what JSB talks about, if you have a good infrastructure network business thrives, but the feedback loop goes the other way as well.
I am sure that the defense industry is having this problem as well... and will get worse
....
U.S. Shoe Factory Finds Supplies Are Achilles' Heel
By TIMOTHY AEPPEL
POMPANO BEACH, Fla. -- Howard Shaffer opened a small factory here in 1995 to make sneakers for Adidas AG -- but also to make a point.
Having spent the previous decade setting up plants in China to manufacture shoes for big U.S. brands, he thought he knew how to revive the moribund U.S. footwear industry: use heavy automation run by a handful of skilled workers instead of relying on large numbers of low-paid Chinese laborers.
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What killed his U.S. factory isn't just competition from Asia's cheap labor, he says. It is the lack of infrastructure needed to make a factory tick, a problem that has bedeviled the few remaining independent shoemakers in the U.S. Finding technicians to fly in on short notice to fix shoe machines was a constant and growing challenge, Mr. Shaffer says, because the number of U.S. companies that make and service machines has dwindled. The suppliers of shoelaces, leather and other basic materials insisted that he buy in batches far larger than made sense for a small-scale producer.
March 05, 2008
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