For too long, a black-and-white myopia has applied scale either everywhere or nowhere in manufacturing industries. We would argue for a more nuanced view – a fundamental reinvention of scale. This reinvention can be accomplished in most industries by breaking the operation’s value chain into vertical functions and horizontal product flows, examining the real cost drivers, and finding those parts of the business where scale applies and those where it does not. By applying the concept of scale differently across different parts of a business, a firm can unleash real power and unlock hidden value.
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