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

#41

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

bencpeters wrote: post #26

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…

I think this is a matter of "our" perspective being different. I also don't have hard stats, but I'd be willing to bet that the average HN reader is much better educated, with many more valuable job skills, and much more entrepreneurial than the average American as a whole. Our economy has been transitioning from a goods/manufacturing-based one to a service-based economy for years. The question in my mind is whether…

No, our employment has been transitioning from manufacturing to services. We make more things than ever before, ignoring small recession-induced blips.

http://research.stlouisfed.org/fred2/series/IPMAN http://research.stlouisfed.org/fred2/series/INDPRO

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

#42

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

diogenescynic wrote: post #4

Apple could afford to reopen the plants they had in Fremont, they just might not be able to produce 100% of their products there . From the NY Times article he refers to: paying American wages would add up to $65 to each iPhone’s expense. Fender does this--they offer you the choice of a Chinese, Mexican, Japanese, or American made guitar and just price accordingly. I would pay more for an iPhone that I knew was made…

Disclosure: I'm a Brit, and my wife is Chinese.

Frankly I have no time for flag-waving 'Buy American' and for that matter 'Buy British' favouritism. I've seen the poverty in rural China first hand, industrialisation over there has it's rough edges that need to be addressed, but if we care about world poverty then that means cutting all the jingoistic claptrap and 'allowing' them to earn a better living.

There are legitimate cases where buying locally makes sense, especially in the case of regional foods or traditionally crafted goods. I'm all for preserving traditional ways of life if it makes sense, but I don't think iPhone assembly line production falls in that category.

The US, Britain and the western world in general has grown rich exporting goods and services to the rest of the world and importing cheap commodities and goods. Fair trade benefits both sides of the bargain. It's time to set aside protectionism and recognise it for the pernicious imperialism and borderline racism it really is.

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

#43

Post by e40 » Thu, Apr 05, 2012, 3:23 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-…

This is part of it, but there are other important factors at play here. In China, the contractors of Apple don't have to adhere to US labor and environmental laws. These are huge factors in decision to outsource production to China.

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

#44

Post by joejohnson » Thu, Apr 05, 2012, 3:24 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.

Do you have a source for that? Foxconn has greater than 1 million employees. I don't think there is any company with a labor force of that scale in the US, or anywhere else in the world. And, per the article at the top of this thread, the bigger issue is the supply chain. If iPhones were made in the Midwest, they would still be importing glass, simple hardware, and thousands of other parts that are still made in China.

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

#45

Post by Splines » Thu, Apr 05, 2012, 3:24 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.

Is this a good analogy to make?

I was thinking that feature bloat is a consequence of this sort of thing happening (applications start out missing features, eventually features start getting added, and they keep getting added to the point where users don't want them anymore), but I'm not certain the mechanics leading up to feature bloat are the identical to what happens in the beer game.

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

#46

Post by ChrisLTD » Thu, Apr 05, 2012, 3:25 PM UTC

bencpeters wrote: post #26

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…

I think this is a matter of "our" perspective being different. I also don't have hard stats, but I'd be willing to bet that the average HN reader is much better educated, with many more valuable job skills, and much more entrepreneurial than the average American as a whole. Our economy has been transitioning from a goods/manufacturing-based one to a service-based economy for years. The question in my mind is whether…

I don't have numbers to back this up, but I think in general it would be a good thing for America as a whole, and for the American middle class in particular, if we began to move back toward being a country of "makers" rather than a country of "service providers."

From the data I've seen from a few Google searches, U.S. industrial manufacturing output keeps going up (with hiccups in recessions), but employment in manufacturing is going down due to increases in efficiency and automation.

Also, I think it's weird to put this dividing line between service providers and makers. I design and program websites for a living, which most people would call a service. But couldn't you also say that I "manufacture" websites? A cook at McDonald's manufactures burgers. A writer a newspaper manufactures articles.

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

#47

Post by ww520 » Thu, Apr 05, 2012, 3:26 PM UTC

ImprovedSilence wrote: post #31

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.

I think GP is drawing an inferred analogy in the software development process, using the supply chain to explain the relationship among all the parties involved.

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

#48

Post by e40 » Thu, Apr 05, 2012, 3:26 PM UTC

tlb wrote: post #17

Having gone through the painful exercise of building robots in the US, I appreciate the problem. Our end-end supply chain latency was 16 weeks, far too long to scale effectively to match demand. Many component changes we wanted to make would have created a 6-week delay, so we had to compromise. A place with a factory across the street that could make screws in 3 hours sounds like heaven.

But what is the cause and what is the effect? The supply chain latency in the US is so high because over the last 3-4 decades we've moved from a producer to a consumer. It's because we don't manufacture stuff anymore that this latency is an issue.

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

#49

Post by jonknee » Thu, Apr 05, 2012, 3:31 PM UTC

> Because of the bullwhip effect illustrated by the game, Apple needs to have factories in China because the supply chain is there. We learned in the Beer Game that minute changes have massive ripple effects along the supply chain.

> The U.S. has lost that industrial base and it’s extremely difficult to get it back. It’s not about unions, jobs Americans don’t want - it’s about delay.

Considering that Foxconn is starting to make iPads in Brazil, this article is way oversimplifying things. It's mostly about labor costs and environmental aspects. The iPad is assembled in China, but most of its components are from elsewhere. The CPU is from Texas, a lot of the other chips are from Korea, etc. It could be assembled in the US without supply troubles.

http://www.macrumors.com/2012/04/05/apple-gains-certificatio...

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

#50

Post by brendn » Thu, Apr 05, 2012, 3:31 PM UTC

damoncali wrote: post #27

Or they could just do like Dell does - require suppliers to carry inventory (on the suppliers' books) within minutes of their factories. You can do that in America just as easily as you can in China.

That may insulate factories from fluctuating inventory supply, but it doesn't solve the problem of fast turnaround when changes are needed. If a part needs to be redesigned, the supplier may still have a weeks-long lead time to get the new part shipped, and has the additional problem of obsolete inventory that is now wasting space near the factory.