Manufacturers can't actually "make money"--but they can Create Value when they make a product worth more than the sum of its parts. The Value Created can even be measured precisely:

VALUE CREATED = SALES - MATERIALS COSTS.

The only way a manufacturer can Create Value is by making improvements to raw materials that customers are willing to pay for.

Manufacturers can't Create Value by making profits, because profits are not part of the Value Created equation. Manufacturers can't Create Value by lowering labor costs, because labor costs are not part of the Value Created equation. Manufacturers can't Create Value by making products. Products have no value until a customers are willing to pay for them.

Manufacturers can't Create Value by making work. Any work that a customer is not willing to pay extra for does not Create Value. Stitching a logo on a shirt is "Value Added Work". The work done finding, collating, collecting, counting, cleaning, upacking, carrying, and returning the cones of thread used to stitch this logo is "Non Value Added Work". It's an investment with no return. The worker worked just as hard not adding value as he did adding value. Management couldn't add any value--they were too busy trying to make workers stitch faster to even notice all that Non Value Added Work.

Value Created is the pie that gets split up into wages, salaries, dividends, and reinvestment in corporate sustainability. When the parties cooperate to make the pie bigger, everyone benefits. Shifting personnel from Non Value Added Work into Value Added Work and sharing the subsequent gains is the most effective way for a management and labor to make less work--and more value.

Value Creation leads to job creation, discretionary income, sustainable profitability, and improved competitiveness. It worked for our company.

It can work for our economy.