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

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

#201

Post by bdunbar »

e40 wrote: post #99
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-…

So because you work for a company that makes stuff, my argument is invalid. You realize I wasn't saying we make nothing at all, right? It's that we are ever making less in the US and ever buying more made elsewhere.

I took your words literally. Sorry about that.

It's that we are ever making less in the US and ever buying more made elsewhere.

iPods, sure.

But if you're talking really expensive, high-quality, hard to make stuff ... it's likely made in the US.

One just doesn't see it because the average guy sees a lot of cell phones, and iPods, but doesn't really notice manhole covers or iron-castings with millionth-of-an-inch tolerances.

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

#202

Post by njs12345 »

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…

This is not always the case. It really depends on how it's done: http://en.wikipedia.org/wiki/Import_substitution_industriali...

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

#203

Post by olalonde »

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?

Straw man.

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

#204

Post by [deleted] »

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…

[deleted]

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

#205

Post by cubicle67 »

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.

are you referring to this?

‘I Want a Glass Screen’

In 2007, a little over a month before the iPhone was scheduled to appear in stores, Mr. Jobs beckoned a handful of lieutenants into an office. For weeks, he had been carrying a prototype of the device in his pocket.

Mr. Jobs angrily held up his iPhone, angling it so everyone could see the dozens of tiny scratches marring its plastic screen, according to someone who attended the meeting. He then pulled his keys from his jeans.

People will carry this phone in their pocket, he said. People also carry their keys in their pocket. “I won’t sell a product that gets scratched,” he said tensely. The only solution was using unscratchable glass instead. “I want a glass screen, and I want it perfect in six weeks.” †

This is a anecdote that now seems to be repeated as fact, but I have serious doubts about it. For starters there was a six month gap between the first demo and launch, and the iPhone was demoed with the glass screen, as evidenced by this quote from David Pogue from January 9, 2007 Apple went through numerous iterations of the glass surface, trying to find one that’s not too slick or too rough, or that shows grease and fingerprints too much. ††

† http://www.nytimes.com/2012/01/22/business/apple-america-and...

†† http://bits.blogs.nytimes.com/2007/01/09/some-hands-on-time-...

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

#206

Post by mechnik »

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.

Might want to revisit all those centuries of Chinese history. There is a gap of over 300 years between the fall of Ming dynasty and the establishment of the People's Republic of China, roughly from the time Mayflower Pilgrims landed on Plymouth Rock to the end of WW2.

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

#207

Post by eitally »

ChuckMcM wrote: post #155
showerst wrote: post #143

Earlier quoted context omitted.

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 ass…

It is possible. I work for a high tech manufacturing company and our minimum bid for work (especially if it's prototyping that could lead to either an ODM/JDM relationship or a more significant mass manufacturing contract) is only a couple thousand dollars. There isn't an Alibaba-type marketplace, but that doesn't mean there aren't a ton of options for hobbyists, startups, universities, or anyone else who just want to build a few of something... and do it in the US/Canada/Western Europe.

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

#208

Post by eitally »

jdietrich wrote: post #154

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…

1) There honestly are people who enjoy this kind of employment.

2) More usually, manufacturing work is appealing because it can be an easy springboard to a more rewarding role/career. It's still true today that thousands and thousands of Americans who have started (or are starting) their career as an assembler or machine operator have had the drive to improve their skills & knowledge and move far upward in the value chain.

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

#209

Post by eitally »

ctdonath wrote: post #20
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…

Did you read the article? The whole point is that you can't just "reopen the plants" because those plants rely on other suppliers in a complex fast-moving supply chain; in China those suppliers are practically next door and have turnaround times measured in hours, while in CA the suppliers are miles, states, or even continents away with turnaround times measured in weeks . One hiccup in supply (say, something's wrong…

This has been a slippery slope for the last 15-20 years, actually. If you look at the history of Acer & Asus, for example, you'll see that they both (Asus was actually started by a few ex-Acer engineers) as component suppliers to larger, western OEMs and contract manufacturers. As they got a foothold there, they expanded their offerings to include more complex manufacturing (motherboards, graphics cards, etc), which they parlayed into a lucrative ODM/JDM business, and then eventually launched their own consumer brands to compete directly with their former customers. It took a decade+ to get from point A-->B, but by the time they finished the transformation it was too late for the slow western behemoths to do anything about it.

And that, as they say, is the rest of the story [of how the global supply chain got Asia-heavy, causing eventual movement of manufacturing & logistics to the region, too]. It hasn't just been labor costs -- not at all; it's that unless there are extenuating circumstances (e.g. Brazilian import tariffs) there is almost always more savings to be had via supply chain refinement than via direct labor cost reduction.

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

#210

Post by eitally »

hkmurakami wrote: post #135

There's another, perhaps overlooked, place that does exactly what the author proclaims as China's manufacturing advantage (proximity, flexibility, etc). And it shouldn't be surprising: It's Toyota's auto manufacturing empire in Aichi Prefecture, Japan. Aichi is only 2000 square miles in area[1], and Toyota's supply chain is concentrated on its Eastern half. It takes less than 1 hour by car (or more relevantly, by tru…

Coincidentally, this is also why "vertical" integration almost never works when the various horizontals are not colocated. The supply chain complexity often introduces enough extra cost (whether time or money) that it's more efficient to just purchase components locally rather than ship things around within a global corporation.
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