Making up more than half of the world’s total GDP at $40 trillion, nothing about the goings on of the manufacturing space is small. Somewhere on its way to becoming the largest market in the world, manufacturing developed a problem with global implications: 20% of every dollar spent in the industry is wasted – adding up to $8 Trillion, or 10% of the global GDP. Typically a 20% efficiency loss would be a red-alert issue, and we have a recent example as proof: for those products impacted by the US-China tariffs, which are economically at the same order of magnitude (10-25%), brands and manufacturers mobilized a massive undertaking to move supply chains they wouldn’t have imagined possible even a few years ago. It would be reasonable to expect a similar effort to reduce this 20% of excess waste, as recouping its loss would bring about a renaissance of value for every company that is part of the manufacturing industry. Unfortunately, and interestingly, that is not the case.
While manufacturing waste comes from a variety of sources, this 20% waste isn’t actually physical waste produced by manufacturing as an industry (which is a topic on its own). I’m talking about the economic waste: money that was spent that arguably, didn’t have to be spent due to inefficiencies in the process of manufacturing things. Let’s consider consumer electronics where the economic waste vectors take many forms across the entire lifecycle of a product, from development into production.