Bob Suh

History has demonstrated that the advantages of labor arbitrage seldom last forever. Moreover, plentiful labor is not a guarantee of skilled labor. Any advantage derived from labor arbitrage will ultimately be outweighed in value terms by accelerated cycle times, reduced defects and greater flexibility. This was a lesson learned by post-war Japanese manufacturers. Once they lost their status as low-cost producers, they began to reinvest in their plants and embrace automation.

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