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Energy prices pose dangers to manufacturing sector

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Reuters Business Channel | Reuters.com:

Another example on the theme of costs and prices

“International competition may limit manufacturing companies' ability to pass on higher raw material costs to their customers, said David Huether, chief economist of the National Association of Manufacturers.

‘While they have better pricing power than a couple years ago, they're still being significantly hurt by rising commodity costs,' he said.”

The article DOES point out, at least, that lean is a strategy for reducing costs to get profits back in line:

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“Cost cuts and better productivity have helped manufacturers to offset the burden, but these have been squeezed as far as they will go…. and a focus on “lean manufacturing” may help them weather a downturn.”

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Now don't confuse “lean” with “cost cuts” meaning layoffs. Lean companies won't take the short-cut approach to slashing costs short-term with layoffs. Identify and fight waste instead!

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Mark Graban is an internationally-recognized consultant, author, and speaker who has worked in healthcare, manufacturing, and startups. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent book is an anthology titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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