My first column talked about why manufacturing matters most for our country. This month, I want to discuss how chasing cheap prices is not only hollowing out domestic manufacturing but, in many cases, it’s making the companies that offshore less profitable. For decades, consultants and MBAs have told companies to focus on their core competencies—mostly R&D, finance and marketing—and outsource manufacturing offshore. Now, companies are discovering that strategy was often wrong.

We’re all aware of the consequences of paying too much.

A manufacturer of analytical instruments uses benchmarking and smart design to lower the total cost of ownership of its products.