Wednesday, August 23, 2006

Global Capacities

I've spent quite a bit of time touring textile plants in Pakistan and China in the past few months. Almost each and every plant I've seen is currently undergoing a massive expansion. The funny thing is that many of these plants are not running at anywhere near fully capacity right now. Seems as though everyone thinks there's beauty in scale. And while there definitely are efficiencies to be gained, overcapacity is a deadly curse. Trust me on this one. I have a great deal of first hand experience with overcapacity and the refusal to deal with it.

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