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

#141

Post by jpadkins » Thu, Apr 05, 2012, 5:53 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…

I completely agree with your point, but I think it's important to point at this is measured in $$ value. We are manufacturing lower volume, higher value stuff than before (high tech) but we probably don't manufacture the same volume that we did 30 years ago (measured by weight or # of widgets).

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

#142

Post by excuse-me » Thu, Apr 05, 2012, 6:00 PM UTC

showerst wrote: post #140

excuse-me wrote: post #137

Earlier quoted context omitted.

Not where I come from it isn't. I'm working class, I come from a pit village in N. England, my father was a miner, my family were miners or steelworkers. I now have a PhD in physics and work in aerospace, but I'm still working class! And for most of my life (certainly my academic career!) I was poorer than most working class people with union jobs on assembly lines.

Those words have slightly different meanings in England vs the US I think. In the US upper vs middle vs working class is related to income and lifestyle. If you're a coal miner who somehow makes 80k/year (i just made that up, who knows if it exists) you'd be firmly middle class in popular discourse the US, despite the fact that you're in a working class job. Similarly one auto-plant can pay union workers 70k (middle…

In the UK class=job not salary. Approiximately; jobs needs a degree=middle class, owning the land = upper class.

Working on oil rig and earning 4x as much as a school teacher still makes that a working class job, the teacher is middle class. The rig manager is working class, the geologist is middle class.

But ultimately it's a personal identity thing. You can be a member of the royal family making furniture or a working class lad making avionics software!

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

#143

Post by showerst » Thu, Apr 05, 2012, 6:01 PM UTC

ChuckMcM wrote: post #65

bdunbar wrote: post #53

Earlier quoted context omitted.

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.

You can't, because that work can't be done here economically, we've moved further up the value chain.

On the flip side, let's say you want to manufacture a new custom processor for your ipad competitor, or turbine for your new 787 competitor. You won't get those things in China, at least not without significant involvement from US companies.

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

#144

Post by nknight » Thu, Apr 05, 2012, 6:04 PM UTC

excuse-me wrote: post #142

showerst wrote: post #140

Earlier quoted context omitted.

Those words have slightly different meanings in England vs the US I think. In the US upper vs middle vs working class is related to income and lifestyle. If you're a coal miner who somehow makes 80k/year (i just made that up, who knows if it exists) you'd be firmly middle class in popular discourse the US, despite the fact that you're in a working class job. Similarly one auto-plant can pay union workers 70k (middle…

In the UK class=job not salary. Approiximately; jobs needs a degree=middle class, owning the land = upper class. Working on oil rig and earning 4x as much as a school teacher still makes that a working class job, the teacher is middle class. The rig manager is working class, the geologist is middle class. But ultimately it's a personal identity thing. You can be a member of the royal family making furniture or a work…

You are speaking of social class, which is highly attenuated in the US. Economic class is what I'm speaking of.

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

#145

Post by DanBC » Thu, Apr 05, 2012, 6:06 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…

No benefits of scale for huge Chinese manufacturing ordering more raw materials?

No benefits from China holding large reserves of raw materials (eg rare earth metals)?

No benefits from Chinese dock workers getting paid a lot less than US dockworker? (See also transport from docks to factories; from factories to docks; from docks to markets.)

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

#146

Post by tzs » Thu, Apr 05, 2012, 6:07 PM UTC

We used to occasionally get to play games like that for actual money when I was an undergraduate. Every so often, grad students in economics would come around to the undergraduate houses at dinner time to announce that they were looking for volunteers for economic experiments that night.

The experiments would typically take place in the social sciences building, with each participant being put in a separate office (that was one of the reasons they were at night--so there would be offices they could borrow). We'd be given instructions on the game to be played, and the phone numbers of other offices if the game involved communication between the players, and the game would start.

Each player would start with a certain amount of game money, and when the game is over that would be converted to real money and the player kept it.

On average, if I recall correctly, players would make about $20-30 or so each in these games. That doesn't sound like a lot, but for a college student in the '80s that would be enough for several nice meals away from food service, or for 3 or 4 albums at the record store. You'd almost always get at least $10, and sometimes someone would make $75-100.

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

#147

Post by scott_s » Thu, Apr 05, 2012, 6:09 PM UTC

This is a great explanation, but this statement is wrong: The U.S. has lost that industrial base and it’s extremely difficult to get it back.

It's important to keep in mind that the US still makes a lot of stuff. In fact, we still make more than most: http://www.npr.org/blogs/money/2011/02/07/133561265/3-ways-o...

However, we're employing less people to do it, and those that we do employ require more education than before: http://www.npr.org/blogs/money/2012/01/13/145039131/the-tran...

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

#148

Post by eli_gottlieb » Thu, Apr 05, 2012, 6:10 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…

Actually, I'd say this is a long-term problem that we won't solve until we stop expecting everyone to have a job and figure out some way to distribute out to everyone a piece of the value created by automation.

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

#149

Post by 178 » Thu, Apr 05, 2012, 6:12 PM UTC

excuse-me wrote: post #121

egsmith wrote: post #93

Earlier quoted context omitted.

Brazil factory is MUCH smaller, for example the new iPad factory only has 1.4K employees, and Brazil gives them tax benefits. http://translate.google.com/translate?hl=en&sl=auto&...

That's the lesson Europe and America learned with import duties years ago. You set duty levels to protect your local industry, it keeps out an international product that customers want and you have no local competitor to. So they open a "screwdriver plant" which just screws the "Made in X" label on. The local government ends up subsidizing this process, under the claim of creating jobs, to far more than the income fr…

The famous example for this in Germany is Nokia of all 'people'.

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

#150

Post by scott_s » Thu, Apr 05, 2012, 6:13 PM UTC

Retric wrote: post #126

kevinalexbrown wrote: post #79

From a practical perspective, it seems to me that the Beer Game rests in three parts: in imperfect information, time delays, and most importantly, independence of agents. If each member of the supply chain knew consumer demand perfectly far enough in the future, they could compensate. Likewise, if each member of the supply chain could instantly scale their process, they could compensate. The key, though, is that even…

That's one piece. The other huge issue is that a Chinese worker can produce an iPad for less than a robot while an American worker costs more. A lean supply chain looks great on the books, but it's also a huge bet that nothing bad happens. However, add flexible enough automation like say having 500,000 humans and you are far less dependent on any one customer so you can ramp up and down vary quickly. Which both reduc…

The other huge issue is that a Chinese worker can produce an iPad for less than a robot while an American worker costs more.

Not by as much of a margin as one would think. Listen to part 3 of This American Life's retraction of the Daisey story: http://www.thisamericanlife.org/radio-archives/episode/460/r...

The conclusion is that the difference per iPad or iPhone is a small percentage of the profit. They argue that it is, in fact, the supply chain that makes the difference.