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Economy of Scale, or Scale: A concept dating back to Adam Smith that states that an entity will reduce cost per unit of output as it gains size (scale). Two drivers of cost reduction are fixed costs getting spread over a larger number of units and the ability of the provider to utilize better production technology. There is a limit to the economy of scale. Beyond a certain size, the cost per additional unit begins to increase due to increased complexity of operation.


Cover of The Supply Chain Revolution


Doesn't work with IT. IT development and operations usually doesn't scale. Instead it uses automatization.