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

#61

Post by _delirium » Thu, Apr 05, 2012, 3:48 PM UTC

showerst wrote: post #36

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 s…

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.

Automation is also making the skill/demand curve look more step-like I believe, where your value stays near zero up until you cross the "better than a machine could do" threshold, instead of scaling in some more smooth way. That makes it harder to get training on the job by just taking low-end jobs and moving up.

From what I've read about welding (e.g. http://www.nytimes.com/2009/06/24/business/24jobs.html?pagew...), highly skilled, experienced welders are very much in demand. But, since low-end welds can be done by machines nowadays, there's much less demand for a welder with get that first 10 years of experience.

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

#62

Post by nknight » Thu, Apr 05, 2012, 3:52 PM UTC

jonknee wrote: post #49

> 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 start…

Red herring. Brazil has some massive import duties, and cut a special deal with Foxconn for local manufacturing. The economic analysis is severely thrown off.

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

#63

Post by jonknee » Thu, Apr 05, 2012, 3:55 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.

You were also operating at an entirely different scale than Apple. You'd have a hard time getting your end product to the US, while Apple simply buys up enough air freight from China to screw up everyone else's supply chain.

Apple doesn't go to the factory next door and buy screws when it needs them, they need millions of screws to very specific specs and sign deals to have them made by different suppliers for years at a time.

They'll go as far as financing the new factory that is required to fulfill their monster orders. The same rules just simply do not apply.

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

#64

Post by nextparadigms » Thu, Apr 05, 2012, 3:56 PM UTC

Maybe politicians will finally understand that "manufacturing jobs" are not coming back to US and stop wasting money by trying to get them back. "Manufacturing" itself could be back - if they start encouraging 99.9% robot manufacturing facilities, and manufacture stuff more efficiently than any Chinese company.

Yes, it won't bring "manufacturing jobs", but it will bring a lot of capital into the country, and will also spur new type of jobs and businesses in relation to that, or it would make it a lot easier for US entrepreneurs to mass-produce their products just from a prototype.

That's the sort of thing politicians should be encouraging - not try to bring back blue-collar jobs.

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

#65

Post by ChuckMcM » Thu, Apr 05, 2012, 3:57 PM UTC

bdunbar wrote: post #53

e40 wrote: post #48

Earlier quoted context omitted.

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.

It's because we don't manufacture stuff anymore that this latency is an issue. I love it when people say that. I love it because I work for a company that very much does still make stuff in the US. We just make more stuff, with fewer people. We also make stuff in Asia, EU, Mexico. It's hard to stereotype who makes what - but generally sites in NA make the complicated, expensive widgets, Asia make the high volume not-…

Harder to find. Where is the alibaba.com of the US? Lets say I want to manufacture a device with a printed circuit board, a case, and some artwork. Where can I fill out a form and have it go to at least a dozen the US manufacturers and have them come back with bids?

This is a huge gap that filling would reap both financial and political rewards.

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

#66

Post by jonknee » Thu, Apr 05, 2012, 3:58 PM UTC

nknight wrote: post #62

jonknee wrote: post #49

> 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 start…

Red herring. Brazil has some massive import duties, and cut a special deal with Foxconn for local manufacturing. The economic analysis is severely thrown off.

According to the article they need to be assembled in China because of the supply chain. I don't see how import duties suddenly make the supply chain work on the other side of the globe.

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

#67

Post by crazygringo » Thu, Apr 05, 2012, 3:59 PM UTC

jonknee wrote: post #49

> 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 start…

Brazil is an exceptional case because of their import tariffs which are far, far higher than any other country in the world.

From the linked article:

"with domestic production of the iPhone and iPad providing a means by which Apple could avoid hefty import taxes in one of the world's most populous countries. "

I don't know any of the details, but I would assume Foxconn is performing the absolute minimum level of assembly necessary to meet "domestic manufacturing" requirements. So it is in no way an effective counterexample.

Plus, Brazilians are used to long supply-chain delays (like major supermarkets in major cities running out of Diet Coke or Ruffles) in a way that Americans will not put up with. Something tells me Foxconn's Brazilian factory may not be too different.

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

#68

Post by mseebach » Thu, Apr 05, 2012, 4:01 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-…

The fallacy in that is that countries don't get to decide and plan what their comparative advantages are. If the US can systematically train it's workforce for higher-cost services, so can China. Except, they can do it faster, cheaper and at a larger scale (like everything else they do). This is what happened with white collar IT jobs going to India.

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

#69

Post by drucken » Thu, Apr 05, 2012, 4:01 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 .

I was just going to post a comment about Goldratt's book. If you think the Beer Game is too simplistic, you really must read that book, it is eye opening - though it will feel a little slow to the HN crowd at first :)

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

#70

Post by josefresco » Thu, Apr 05, 2012, 4:02 PM UTC

e40 wrote: post #43

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.

...not to mention currency and wage issues.