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

#151

Post by [deleted] » Thu, Apr 05, 2012, 6:24 PM UTC

randomdata wrote: post #96

jonknee wrote: post #76

Earlier quoted context omitted.

> 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. It's absolutely a counterexample. The iPad is assembled in China, but its parts are from all over the world. Now it's also assembled in Brazil. The supply chain in China isn't critical to the iPad's a…

I recall from another article that Apple requires 9,000 engineers to oversee the production of the iPhone. It is not that the USA has fewer than 9,000 engineers, but you would be lucky to find one engineer that is unemployed, let alone 9,000 of them. China, on the other hand, and perhaps Brazil, has engineers looking for work. Nothing is insurmountable with enough time and effort, but demonstrating that Brazil can ea…

[deleted]

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

#152

Post by wtvanhest » Thu, Apr 05, 2012, 6:31 PM UTC

runako wrote: post #33

wtvanhest wrote: post #25

Earlier quoted context omitted.

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.

I'm sure everyone of those parts is built in the US. I do not know the location of every FAB, nor battery manufacturer, nor display manufacturer, and neither does anyone else.

What we do know is that Intel has a fab in Arizona for example and Corning's headquarters (gorilla glass) are in NY etc.

I also don't know for sure what is in each city in China. While it is public information (for the most part), finding a source to back my claim would be as possible as backing the authors claim.

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

#153

Post by jonknee » Thu, Apr 05, 2012, 6:31 PM UTC

excuse-me wrote: post #120

jonknee wrote: post #63

Earlier quoted context omitted.

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…

One of the examples ( in the original article that this posts copies ) Apple changed the glass on the screen with 6weeks until launch. Corning had opened a factory nearby to make the glass and were able to change the screen shape quickly another nearby company was able to drop everything and make new gaskets. It takes 6weeks to ship product from Corning's US factory to China.

> It takes 6weeks to ship product from Corning's US factory to China.

And they could build a factory anywhere in the world. In the mean time, they can ship as fast as they need. Apple already ships from the factory nearly directly to customers in the US in a couple of days.

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

#154

Post by jdietrich » Thu, Apr 05, 2012, 6:59 PM UTC

I hear a lot of people saying that America needs more manufacturing jobs, but I can't recall ever hearing anyone say that they want to spend the rest of their life doing repetitive assembly operations on a production line.

We use Chinese workers because they're cheaper than robots. These are awful, tedious, soul-destroying jobs, but they're just marginally better than backbreaking agricultural labour. Nobody deserves to do those jobs and soon nobody will have to, because we will have automated them out of existence. That's unequivocally a good thing.

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

#155

Post by ChuckMcM » Thu, Apr 05, 2012, 6:59 PM UTC

showerst wrote: post #143

ChuckMcM wrote: post #65

Earlier quoted context omitted.

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.

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

Fundamentally I don't believe that. I could just be stupid.

I see the automation that is possible in the US, the infrastructure, and you tell me that its not possible for someone to make a business out of assembling things? Sure its cheap to pull 10 dextrous laborers out of the Chinese working class and make an assembly work cell out of them, what prevents a technologically sophisticated engineer from doing the same with one robot workstation and some programming? I've had boards made and assembled in the US, that is pretty straight forward, getting a tool and die shop to make cases isn't that hard either. What I haven't seen is an infrastructure that ties together all of these small shops like the ones in China, Korea, and Malaysia do.

Disruption is our middle name, why not disrupt the world of real goods?

Here is my thesis, creating a 'small' factory in the US is hindered by the inability of that factory to find work to fill its capacity. That limits its ability to make a profit, so the bids are priced to make sense when the factory is running far below its ability to produce. That makes the costs of goods it produces 'expensive' relative to a factory which is running at or near its theoretical capacity. If we had a way of keeping those small factories pipelines of work 'full', they could charge less because they would be getting more work out of their sunk costs (equipment, facilities, power, etc). In terms of comparative advantage we gain, transportation and communication benefits to the local markets.

So tell me why that isn't possible?

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

#156

Post by Retric » Thu, Apr 05, 2012, 7:00 PM UTC

scott_s wrote: post #150

Retric wrote: post #126

Earlier quoted context omitted.

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 i…

The estimate was moving manufacturing in the US would cost up to 65$ per iPhone and Apple is selling around 80 million iPhones a year. That approximation 5 billion dollars in lost profit each and every year just to build iPhones in the US. That's simply untenable for a publicly traded company even ignoring the added cost for iPod's and iPad's. Now they could probably give up say 100 million in profit per year and have dramatically better working conditions in China, but even that's a hard sell to stockholders.

Having said that, Apple could redesign the iPhone to be easier for robot's to assemble and move manufacturing back to the US, but it's simply untenable to have Americans assemble such things at this scale in the US. But, this is where the supply chain issues show up and if they designed the iPhone to be built by robots they would as you suggest probably locate those robots in China.

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

#157

Post by 8bitliving » Thu, Apr 05, 2012, 7:02 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.

I think Ariba.com may be able to do what you described.

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

#158

Post by pbhjpbhj » Thu, Apr 05, 2012, 7:09 PM UTC

eogas wrote: post #39

pagekalisedown wrote: post #19

Earlier quoted context omitted.

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

free to watch on hulu for anyone _from_USA_ who's interested

FTFY. Hulu restricts access pseudo-geographically using IP-based geolocation it seems.

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

#159

Post by gregpilling » Thu, Apr 05, 2012, 7:09 PM UTC

_delirium wrote: post #61

showerst wrote: post #36

Earlier quoted context omitted.

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…

I own a company that does quite a bit of welding, both manually and with a robot. Your comment "since low-end welds can be done by machines nowadays, there's much less demand for a welder with Our robot needs the skills of an experienced welder in order to set it up. It is extremely difficult to get it set up correctly if you don't know how to weld, set the wire feed, set the amperage, etc. Personally, I can't weld very well, nor am I good at setting up the robot. I rely heavily on my lead welder to get the settings right for the robot, and once it is setup properly (which can be a few hours or a few days, depending on complexity) only then can a less experienced non-welder type worker run the machine. SO my lead welder does the jig design, figures out torch angles and then an outside contractor comes in and does the programming (Windows CE, on a Panasonic arm). Since we manufacture many of the same parts day to day, we only need the contractor once a month or so. Jigs are designed for quick change, with pins to set them exactly in place.

The robot is excellent at complex work, as well as "low end welds". Without a skilled and experienced welder for the setups, it is just a useless hunk of metal. You are correct if you think that a lower skilled worker can operate it on a daily basis however. The operator does not have to know how to weld at all (just how to push the emergency stop button and yell for help). The NY Times article is speaking about welders that doing some of the most difficult welds of all, and finding a person with those skills is about as rare as finding a really awesome iOS developer who is out of work. The people who can do that sort of welding are few and far between, since it has to be flawless.

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

#160

Post by excuse-me » Thu, Apr 05, 2012, 7:10 PM UTC

jonknee wrote: post #153

excuse-me wrote: post #120

Earlier quoted context omitted.

One of the examples ( in the original article that this posts copies ) Apple changed the glass on the screen with 6weeks until launch. Corning had opened a factory nearby to make the glass and were able to change the screen shape quickly another nearby company was able to drop everything and make new gaskets. It takes 6weeks to ship product from Corning's US factory to China.

> It takes 6weeks to ship product from Corning's US factory to China. And they could build a factory anywhere in the world. In the mean time, they can ship as fast as they need. Apple already ships from the factory nearly directly to customers in the US in a couple of days.

I suspect the margin on finished iPads supports airfreight. The margin on components doesn't