For a few weeks now we have been witnessing some events which will probably further worsen the economic crisis currently taking place in Italy.
The devaluation of the Yuan
In an effort to return competitiveness to industry, China has devaluated its currency by 10%.
The move is the result of the significant slowing down of exports.
The consequence of this will be that the import companies from that area will be able to purchase products with a discount of at least 10% compared to before; this will cause problems for a number of Italian companies who had just started selling again thanks to the decreased Chinese competition.
With the loss of the Yuan’s purchasing power, Chinese orders for goods produced in Italy will likely decrease.
Lean Manufacturing in China
Recently, I was contacted by a consulting company operating in Asia in order to evaluate several collaborations...
The CEO of this company is hiring Lean Production consultants (of the Asian area) at breakneck speed in order to satisfy the demand for Lean Production implementation in China by Chinese companies.
Migrations and Job market
It is beyond question that one of the effects that the immigration taking place is that of lowering (in the medium/long term) the job cost.
This is what has been planned for some time by the “lords of world commerce” and the politicians (their servants) are diligently following orders...
If you observe the chart here below, you can see that the economic and political pressure for decreasing salaries in Italy will further continue and it is pure illusion to hope to maintain the purchasing power and work rights gained to date.
Globalization is imposing at forced phases the achievement of a medium level of retribution on a global level; for now it will be suffering for all of us.
Which will the consequences be?
For Italy:
For the Italians, because of the shrinking of purchasing power of the salaries towards the “level of global medium retribution”, they will purchase less or they will purchase Chinese.
Chinese and Asian territory competitiveness will become stronger and will create problems for all those companies who produce all those goods which can conveniently be crammed into a 20-foot container.
What does Lean Manufacturing have to do with this?
When there is economic crisis, no one no longer risks having a warehouse of unsold products; the companies who do not adapt their processes to the philosophy of making the most with minimum resources will be forced to succumb.
Lean manufacturing is the only system that makes it possible to:
- Achieve cost reduction in the double digits.
- Work with money in circulation.
- Achieve operating efficiency.
- Ensure that through the culture of continuous improvement, the company continues to be competitive.
Implementing true lean production is not easy to achieve but the time in which it was possible to play around with its methods is now over.
The times ahead force managers to use real and profound Lean production transformations.
Mario Mason
Kaizen Coach
