The manufacturing model you describe is very interesting. You may want to write a separate post on that. In the US, when manufacturing started a system called “putting out” was used similar to what you describe. You may want to look up Alfred Chandler’s classic the “The Visible Hand” which describes this method. This book is a counter to Adam Smith’s Invisible Hand of the market. It is an excellent book.

Would like to add that I enjoyed success after reading this book when I was back in India ‘ selling a home grown ERP product to a small scale manufacturing company in Kerala.

I was actually amazed at the operations and efficiency with which they operate ‘ they don’t have a factory in India, and they don’t have any factory workers. (Note that this is an important factor in the marxist communist world of Kerala) All the parts are manufactured mainly in China and some in Thailand/Malaysia. The assembly is done by individuals/families (mostly women) at their homes. Every week they come to the Office, pick up their supplies of parts and take it home. End of the week, finished product is bought back to the office where it is inspected by a handful of employees and they get paid immediately. This is in a large scale where thousands of such individuals work at their homes and is scheduled so well so that every day there is delivery of the finished product. It is a consumer product and each individual is also incented if they come up with new designs or new product ideas.

I am not sure whether SAP or Oracle can handle such a manufacturing model, we had to custom develop one.

Anyway, I had to sell the ERP product and having read the book, Theory of Constraints was my key talking point with the customer. (I did gift the book to him post sale: )