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

#81

Post by tlb » Thu, Apr 05, 2012, 4:08 PM UTC

acslater00 wrote: post #54

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.

That's a myth. The US has a huge and growing manufacturing base. We make airplane engines, medical devices, computer chips; all kinds of complex, high-tech manufacturing. We have the highest manufacturing productivity per worker in the world. What we don't make anymore are the kinds of products that require rote assembly tasks, like shoes and clothes and iPads. The upshot is that we have decreasing manufacturing empl…

Everything you mention has long design cycle times. Airplane engines and medical devices need certification, which means you can't iterate fast anyway. Chips take 8+ weeks to iterate on the lithography. An efficient consumer electronics operation in China can iterate every day.

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

#82

Post by OzzyB » Thu, Apr 05, 2012, 4:12 PM UTC

Would it be fair to say that the reason Apple has their entire supply chain in China is because those "supply clusters" were already there because of the Japanese consumer tech companies that built them up in the 80's?

(I have no idea when or how exactly, but the "80's" seems to be around the time of the "Japanese Electronic Invasion")

In other words, for a "new" company like Apple, starting out with all their new iDevices, it simply made sense for them to go where the supply was?

It's kind of like Apple "piggybacked" and exploited all the gains made by the Sonys, Sharps & Casios of the world, and beat them at their own game.

I think if we move beyond the analogies of cars and other consumerables, and focus on what Apple is really doing, which is essentially Consumer Tech, then it simply makes sense for them to be where the guy that makes those fancy LCD screens is at?

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

#83

Post by krupan » Thu, Apr 05, 2012, 4:13 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…

From what you are saying, instead of investing in creating jobs for people with low skills, it would be better to invest more in helping people take the time to get training and education.

Seems like having more educated people that can get higher paying jobs, which give them more disposable income and more free time, would be a much bigger win for our society than simply creating more unskilled labor jobs.

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

#84

Post by A_A » Thu, Apr 05, 2012, 4:13 PM UTC

dgabriel wrote: post #2

I think they teach this game at most business schools, and it seems to be a popular and eye-opening experience. If you hit wikipedia, there are a number of links to online versions you can play (some for free, some not). http://en.wikipedia.org/wiki/Beer_distribution_game

That's right. the Beer game is one of the first things taught in Operations Management in most b-schools, as an example of Supply Chain Management. [I was fortunate to have been introduced to the subject by John Sterman]

In general, delays (i.e. lead times) and variations in orders will do that Beer game effect to any supply chain, no matter where it's located. Apple products are "made in china" because of various reasons -- comparative advantage, business cluster etc.

I'd highly recommend a good reading of systems dynamics (and business dynamics) for those looking for more info.

For those interested, two recommended books:

* "Clock Speed" by Charles Fine (MIT)

* "Business Dynamics" by John Sterman (also of MIT, and a great professor): http://goo.gl/K4OG (Amazon.com link)

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

#85

Post by mseebach » Thu, Apr 05, 2012, 4:14 PM UTC

rbarooah wrote: post #51

simonh wrote: post #42

Earlier quoted context omitted.

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 leg…

Don't you think that decades of isolationist Maoism had more influence on the rural poverty in China than US and British protectionism?

The Mao isolation was just a continuation of centuries of Ming isolation, and, emphatically, yes.

I think the GP meant modern protectionism in the sense of "Buy American/British/etc" movements.

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

#86

Post by zipdog » Thu, Apr 05, 2012, 4:16 PM UTC

The beer game is also mentioned in Peter Senge's The Fifth Disciple, where he suggests it originated from MIT in the 1960s. I think he had one less link in the chain (3 players not 4) but still the effect was the same.

btw, His book is a good intro to the way small changes effect integrated systems, particularly in business.

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

#87

Post by diogenescynic » Thu, Apr 05, 2012, 4:20 PM UTC

yummyfajitas wrote: post #16

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…

...paying American wages would add up to $65 to each iPhone’s expense. The point of the article is to illustrate that wages are not the only problem. Chaotic effects in multi-tier supply chains are also a real problem. I would pay more for an iPhone that I knew was made in America. I'm sure I'm not the only one. You are certainly a minority. I don't think most people value nationalism at $65. Personally, I'd rather h…

You only chose to respond to a portion of what I wrote or didn't read the first sentence so I've italicized it for clarification: they just might not be able to produce 100% of their products there [in Fremont]. Maybe you're not familiar with guitars either, but Fender American made are substantially more expensive but they are in definitely in demand. There is also demand for a cheaper entry level product--both products serve a need. Why do you think it has to be one or the other?

What you're talking about sounds like Ayn Rand's objectivism--basing your argument 100% on cost. I think you're wrong about this--Whole Foods, Trader Joe's, Red Wing Shoes, and local coop growth shows that people do care where they get their products from when given a choice.

Also, please stop making assumptions about me: rather than to people who are superficially "like me".

Where did I say this and where do you come off being so vitriolic? Personally I come to HN for an intellectual discussion and don't appreciate your condescending attitude, or mischaracterization of my comments, or lack of intellectual integrity, or your argument by fallacy. You responded to your own strawman argument because it was easier than responding to what I actually said. You argue like a bully--if I disagree with you I am 'nationalistic and superficial'? That seems like an elevated discussion.

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

#88

Post by rbarooah » Thu, Apr 05, 2012, 4:21 PM UTC

mseebach wrote: post #85

rbarooah wrote: post #51

Earlier quoted context omitted.

Don't you think that decades of isolationist Maoism had more influence on the rural poverty in China than US and British protectionism?

The Mao isolation was just a continuation of centuries of Ming isolation, and, emphatically, yes. I think the GP meant modern protectionism in the sense of "Buy American/British/etc" movements.

By talking about how the US and Britain had grown rich through trade and 'imperialist' protectionism and mentioning racism, the GP seemed to be implying that the poverty in China was somehow created by these western countries.

Aren't those modern "buy British" or "buy American" movements voluntary? Might there not be good reasons for supporting those who are economically tied to you by culture and legal jurisdiction?

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

#89

Post by ArtB » Thu, Apr 05, 2012, 4:21 PM UTC

simonh wrote: post #42

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 leg…

How about trying to create the greatest economy for our children? I care about the poor in China... but only after my own are taken care of. For me, family comes first, and then fellow citizens, and then the rest of the world.

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

#90

Post by kreilly » Thu, Apr 05, 2012, 4:21 PM UTC

dgabriel wrote: post #2

I think they teach this game at most business schools, and it seems to be a popular and eye-opening experience. If you hit wikipedia, there are a number of links to online versions you can play (some for free, some not). http://en.wikipedia.org/wiki/Beer_distribution_game

Yes, I did this in business school. We called it the "Bull Whip Effect" because a small movement on one end of the supply chain caused a dramatic impact on the other end.