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Simply put, if you manufacture in-house as well as design, both processes innovate each other. But if you outsource manufacture, it's a black hole; very little flows the other way because of language and cultural barriers.

That assumes there is enough juice remaining in manufacturing optimization. After a certain stage in a product's lifetime, you've done the bulk of the optimization and doing manufacturing in-house could bring minimal benefit.

Let's not swap one assumption for another perhaps hidden one. In this case, the assumption that the product life cycle is long enough that you ever have "mature" products. The article points out that the appliance product life cycles used to be 7 years or so and now they're 2-3 years and that a good bit of the monetary advantage to building in the US came from product improvements that arose from co-locating engineering and manufacturing and getting them to cooperate.

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