The ability to achieve economies of scale is the foundation of much of the world’s modern wealth. In the original Ford Motor factory in Detroit, the company managed to gradually take the time required to assemble a model T from 12 hours to 93 minutes. The process of endless methodical improvement included everything from just speeding up the production to offering few or no options to finding a version of black paint that would dry faster than others.
Very simply: Bigger is not endlessly better. There is a range of scales as what is “optimal” – large enough to take advantage of economies, but not so large as to be strangled in red tape. The bottom end of this range is known as “minimum economic scale” and it’s important because the smaller it is, the more firms and more competition you can support in a market.
Even as technology changes are driving some industries to consolidate because entities must have ever bigger scale to stay competitive; others are being upended in the other direction. 3-D printing is slowly transforming manufacturing by driving down scale significantly. Traditionally, metal-stamping presses can churn out a large number of parts quickly and cheaply, but the fixed cost is high, and they can only do one part at a time.
Systems integration – linking up firms so they can work in tandem – is quickly becoming the key to maturing businesses and growing them. No company makes or produces everything itself. Instead, nearly every business is a game of coordination where firms add their most unique and useful value to a long chain of partners.
Coin Coin Latest News, Coin Coin Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: CoinDesk - 🏆 291. / 63 Read more »
Source: CoinDesk - 🏆 291. / 63 Read more »
Source: Utoday_en - 🏆 295. / 63 Read more »
Source: Utoday_en - 🏆 295. / 63 Read more »