The Beer Game -or- Why Apple Can’t Build iPads in the US • Hacker News Board

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#31

Post by ImprovedSilence » Thu, Apr 05, 2012, 3:17 PM UTC

raganwald wrote: post #7

People often draw analogies between software development and manufacturing. If you’re going to do that, it’s vital to take the “supply chain” of information into account. The inefficiencies inherent in creating a supply chain consisting of a developer, a tech lead, a product manager, an operations manager, and finally a user resemble the supply chain in the drinking game. Orders go one way, features go the other way.

Did you finish the article? I think it's more focused on the hardware aspect of apples supply chain, and not so much on software development.

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#32

Post by ap22213 » Thu, Apr 05, 2012, 3:18 PM UTC

The reason why iPads are built in China is because of a thing called Comparative Advantage [1].

Even though the US could reasonably produce iPads _more_ efficiently than China, it doesn't. The reason is that the US is even more efficient at supplying higher-cost services (software, finance, etc.) than China that it would be at producing iPads. Therefore, the US is better off training more of its workforce for higher-cost services than to train them to be laborers.

[1] http://en.wikipedia.org/wiki/Comparative_advantage

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#33

Post by runako » Thu, Apr 05, 2012, 3:19 PM UTC

wtvanhest wrote: post #25

rbarooah wrote: post #14

Earlier quoted context omitted.

How is it that you accept that 'colocation theory' explains Silicon Valley, but you dismiss it as explaining Shenzhen without explaining why one is different from the other?

That is a good question, sorry I wasn't more clear. The basic reason is that there is plenty of manufacturing all over the Midwest that could easily produce the entire Apple supply chain. Shenzhen can also produce that supply chain, but they are no more capable than a lot of American cities. What Shenzhen has that America doesn't are cheap labor, and a devalued currency. Silicon Valley is different primarily because…

> The basic reason is that there is plenty of manufacturing all over the Midwest that could easily produce the entire Apple supply chain.

Citation needed. There's a huge number of companies making memory, displays, batteries, CPUs at scale in the midwest? Who are they currently selling their products to? I admit to being very ignorant of such firms.

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#34

Post by maak » Thu, Apr 05, 2012, 3:19 PM UTC

ap22213 wrote: post #32

The reason why iPads are built in China is because of a thing called Comparative Advantage [1]. Even though the US could reasonably produce iPads _more_ efficiently than China, it doesn't. The reason is that the US is even more efficient at supplying higher-cost services (software, finance, etc.) than China that it would be at producing iPads. Therefore, the US is better off training more of its workforce for higher-…

Nicely put.

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#35

Post by rbarooah » Thu, Apr 05, 2012, 3:19 PM UTC

wtvanhest wrote: post #25

rbarooah wrote: post #14

Earlier quoted context omitted.

How is it that you accept that 'colocation theory' explains Silicon Valley, but you dismiss it as explaining Shenzhen without explaining why one is different from the other?

That is a good question, sorry I wasn't more clear. The basic reason is that there is plenty of manufacturing all over the Midwest that could easily produce the entire Apple supply chain. Shenzhen can also produce that supply chain, but they are no more capable than a lot of American cities. What Shenzhen has that America doesn't are cheap labor, and a devalued currency. Silicon Valley is different primarily because…

The midwest has some great manufacturing industries, but the idea that it is anywhere near ready to replicate Shenzhen on any reasonable timeframe or cost basis is simply not credible.

The expertise, density and investment levels are totally different and cannot be rapidly changed.

I'll go as far to say that a devalued currency and/or cheap labor may have been the reason the manufacturing base moved initially, but technology has advanced since that time and Shenzhen has now built up an infrastructure advantage which is much harder to counter.

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#36

Post by showerst » Thu, Apr 05, 2012, 3:20 PM UTC

krupan wrote: post #9

I don't know, do all the unemployed people in a America right now want to work on assembly lines in factories? I know, just because I don't want to doesn't mean everyone else thinks that way, but it just doesn't seem like the correct long-term fix for unemployment. Factory work just doesn't seem like a viable long-term career. I suppose it's the non-hourly-wage assembly-line jobs that come with manufacturing that are…

It's not that they necessarily want factories, it's that they're looking for stable career for life jobs for people with _low skills_, which is the difficult part.

There are tons of openings in the US for plumbers, and (i believe, not sure post housing boom) also electricians, welders, pipe-fitters, etc.

The problem is that these are all jobs that require a few years of training, which the US system isn't very well set up for. The factory thing is an easy-out because we have this huge base of people who have basically no skills and we want (need) to absorb them into the economy as fast as possible, and without investing tons of money to train them. Even if we had this money, and the capacity to train them, dropping an extra 100k nurses (or whatever) into the system at once probably wouldn't be a good thing either.

This is a long term problem that we probably won't solve until we hit the point that we're educating enough people in the right things that competition for unskilled jobs hits more or less equilibrium.

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#37

Post by snitzr » Thu, Apr 05, 2012, 3:20 PM UTC

There is a difference between the bullwhip effect and JIT (just in time) manufacturing. Building your assembly plant near your suppliers is JIT and it helps reduce in-process inventory. Less in-process work and faster delivery to the assembly plant means you can ship product faster. This is important for a fast-moving tech manufacturer.

The bullwhip effect is caused by delay and uncertainty in demand. JIT helps minimize its effects, but doesn't ensure its elimination. Coordinating your demand with retailers is one way to prevent the bullwhip effect. I'm guessing Apple has effective inventory and order coordination with their retailers.

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#38

Post by 18pfsmt » Thu, Apr 05, 2012, 3:21 PM UTC

stonemetal wrote: post #30

DanBC wrote: post #10

Earlier quoted context omitted.

The robot tech might be developed in the US (or where ever) but is still built in China. That makes sense, because it's used in China. And as expertise in building stuff concentrates in China all they need to do is keep quality high, keep costs low, and maybe keep an eye on human rights, and they'll keep the jobs. The barriers to US companies become higher. You've got to get the machines. You then need people to run…

The robot tech might be developed in the US (or where ever) but is still built in China. That makes sense, because it's used in China. And as expertise in building stuff concentrates in China all they need to do is keep quality high, keep costs low, and maybe keep an eye on human rights, and they'll keep the jobs. If we assume raw materials are bought on the global market (so same price in the US and China), then the…

I believe you are missing regulatory compliance costs, which are significant in the US. I'm not quite sure how robotics alters that variable though.

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#39

Post by eogas » Thu, Apr 05, 2012, 3:21 PM UTC

pagekalisedown wrote: post #19

chrisrhoden wrote: post #3

In case anyone's curious why beer was used as the product in the game, it's likely because US law requires that alcohol be distributed in (almost) this way: http://en.wikipedia.org/wiki/Three-tier_(alcohol_distributio...

For a good documentary that illustrates the system we have in place, check out: http://en.wikipedia.org/wiki/Beer_Wars

It's also free to watch on hulu for anyone who's interested:

http://www.hulu.com/watch/235712/beer-wars

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#40

Post by snitzr » Thu, Apr 05, 2012, 3:22 PM UTC

kenrikm wrote: post #11

If you're interesting in learning more about this read the book "The Goal" it's presented as a novel and the main character is rather daft, however it has a lot of insight in it if you can look past that fact they everything is explained as if the main character is really slow .

+1 because The Goal teaches The Theory of Constraints, which is useful for anyone managing team resources.