Chapter 1


From 2000 through 2010, China’s gross domestic product (GDP) averaged 10 percent growth year on year. This level of growth was eight times what the U.S. economy experienced over the same period.1 Few sectors have felt the impact of China’s emergence more than U.S. manufacturing.

“Can you believe the prices on these parts from China?”

“I guess we’ll just have to step up our Lean Manufacturing efforts.”

“Are you kidding? These prices are lower than our material costs. There’s no way to close this kind of gap with efficiency improvements.”

“What are you suggesting? We can’t just exit the business.”

“I know. But we can’t compete with these prices.”

“Our quality is better.”

“Sure. But, only if people are willing to pay for ...

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