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# Creating an Internal Manufacturing Competency
- URL: https://www.kevinmeyer.com/creating-an-int/
- Published: 2008-07-25T04:16:00.000Z
- Updated: 2026-05-09T18:57:46.000Z
- Author: Kevin Meyer
- Tags: Companies, #Migrated-1752356847400, #wp, #wp-post, #Import 2025-07-12 14:48

At a time when most companies are fleeing manufacturing in fear, a handful are still seeing it as a way to create competitive advantage.

> *In an old seaport city near its Osaka headquarters, Sharp Corp. is building a $9 billion factory complex the size of 32 baseball stadiums to make liquid-crystal-display panels and solar panels. The complex, which Sharp broke ground last November, will be the world's largest LCD and next-generation solar panel plant when it is ready sometime in the next fiscal year, ending March 2010.*

One of the unique attributes of Sharp's new factory, although similar to a concept that Toyota and some other auto companies embrace, is the co-location of suppliers.

> *It will house most of its major suppliers on the same premises. Designed for both LCD's and solar panels, which share a similar manufacturing process, it will include factories for its major suppliers including Asahi Glass Co. and Corning Inc., which makes the glass for the panels.*

Sharps' investment runs counter to the philosophy of many other electronics firms.

> *While Apple Inc. is leading a trend in the electronics industry to outsource hardware manufacturing and focus on design and software, Sharp is making a huge bet that keeping manufacturing of LCD and solar panels in-house will give it a big competitive advantage.* 
>  
> *Still, if Sharp continues to be successful, the focused-manufacturing strategy could be a model for other Japanese electronics makers, which find Apple's outsourcing model a turnoff and are still trying to figure out a way to remain a manufacturer while growing its profit in an industry that is rapidly commoditizing.*

That commoditizing is a concern, so CEO Katsuhiko Machida is betting on a change in market dynamics.

> *"There will eventually be no distinction between a parts manufacturer and an electronics maker," says Mr. Machida, adding that LCD panels have the potential to embed so much technology that a television in the future could consist of just a panel and a plastic frame. When that happens, Mr. Machida figures that the parts makers will profit even if the finished goods become commoditized.*

Good luck to Mr. Machida; it's great to see a CEO recognize the value of an internal manufacturing competency.