Friday, August 1, 2008


I had a fantastic evening! My wife and I spent the evening at a private club near Lake Ontario. The weather was perfect -- sunshine and a light breeze. The beer was cold, and the company friendly. I spent a few minutes talking to the owner of a machine tool manufacturer. Of course, the topic turned to China. He explained that his business is growing, and that he is selling more and more machine tools into China. With the abundance of very cheap (and worth every penny) machine tools in China, why would any Chinese company spend the money to import an American machine?

In The World is Flat , Thomas Friedman explains the triple convergence. Convergence two is the evolution of flanking technologies and business processes needed to make the most of new technology.

Friedman is spot on, and it couldn't be more obvious than in the machine shops of China. I'd often remarked that I could produce massive improvements in Chinese machining productivity and accuracy by opening a school for operations managers and CNC programmers and setup people. (This isn't universally true -- of course, there are some fantastic machine shops in China. They are rare.) I often joked that most shops ran CNC equipment like they were running old manual engine lathes. In short, they were spending the money, but not seeing the gains in accuracy and productivity simply because they were running the new technology the same way they ran the old technology.

Things are changing. A more competitive market has forced Chinese machine shops to get the most out of their equipment. They have invested in training, and the convergence of skill and technology is increasingly apparent. This was confirmed by my conversation this evening. The Chinese are seeking training, and his distributors are providing it, making his machine tools a real value in the Chinese market.

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