The fundamental model we teach MBAs for thinking about manufacturing is the valuechain, a simple model that describes the valueadding steps that take a low value material like iron ore and turn it into a high value product like a Ferrari Testarossa.
It started at the simplest of activities in the valuechain, then, decision by decision, every time that Dell outsourced the next lowest-value-adding of the remaining activities in its business, Asus added a higher value-adding activity to its business.