Sharp Miscalculation

New York — The Wall Street Journal gave a big spread to Sharp’s $9 billion bet on LCD manufacturing today. But Sharp has had a NORTH RIVER MANAGEMENT GRADE  F since we began collecting data on it in 1996 and is deep in the type of trouble that NRV’s new CORPORATE INNOVATION PROJECT is designed to solve.


The chart shows the gravity of Sharp’s difficulties. In spite of some movement over the last decade, the company is well into the Dead Zone of our Soccer Ball System for gauging the speed of operations, core to accretive innovation.


The NRV system shows exactly where Sharp needs to innovate to get out of the Dead Zone and to make innovation accretive for the long term.


To take a bet of the size Sharp proposes — between a third and a quarter of its sales on an LCD factory at Sakai the size of 32 baseball stadiums — the company should already be testing 20 days of inventory instead of the 49 it has.


The theory is that Sharp will invest only $4.3 billion of the $9 billion cost and that its suppliers, who will be housed there too, will spend the rest. This proximity will, in principle, cut Sharp’s inventory days…