ABSTRACT
In 1983, it cost GE $218 to make a typical microwave oven. It cost Korea’s Samsung only $155. Then we broke the costs down: assembly labor cost GE $8 per oven; Samsung only 63 cents. The differences in overhead labor – supervision, maintenance, setup – were even more astounding: for GE it was $30 per oven, for Samsung, 73 cents. GE was spending $4 on materials handling for each oven; Samsung 12 cents. The biggest area of difference was in GE’s line and central management – that came to $10 per oven. At Samsung it was 2 cents.1
