{"id":390,"date":"2012-01-29T22:28:22","date_gmt":"2012-01-30T03:28:22","guid":{"rendered":"http:\/\/at-scm.com\/?p=390"},"modified":"2012-01-29T22:28:23","modified_gmt":"2012-01-30T03:28:23","slug":"why-apple-makes-iphones-in-china-and-why-the-us-is-screwed","status":"publish","type":"post","link":"http:\/\/at-scm.com\/index.php\/2012\/01\/29\/supply-chain-management\/why-apple-makes-iphones-in-china-and-why-the-us-is-screwed\/","title":{"rendered":"Why Apple makes iPhones in China and Why the US is screwed?"},"content":{"rendered":"

Two recent articles, one being the retelling of another, delve into some of the reasons why Apple makes iPhones in China and by implication not in the USA. The original article was from the New York Times, How the US lost out on iPhone Work<\/a> and the retelling was recounted in This Article Explains why Apple makes iPhones in China and why the US is screwed<\/a>.<\/p>\n

There is no article about China which doesn\u2019t recount some of the following snippets:<\/p>\n

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When one reads about these working conditions \u2014 12-16 hour shifts, pay of ~$1 per hour or less, dormitories with 15 beds in 12×12 rooms<\/p>\n<\/blockquote>\n

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For Mr. Cook, the focus on Asia \u201ccame down to two things,\u201d said one former high-ranking Apple executive. Factories in Asia \u201ccan scale up and down faster\u201d and \u201cAsian supply chains have surpassed what\u2019s in the U.S.\u201d<\/p>\n<\/blockquote>\n

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\u201cThe entire supply chain is in China now,\u201d said another former high-ranking Apple executive. \u201cYou need a thousand rubber gaskets? That\u2019s the factory next door. You need a million screws? That factory is a block away. You need that screw made a little bit different? It will take three hours.\u201d<\/p>\n<\/blockquote>\n

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\u201cThe entire supply chain is in China now,\u201d said another former high-ranking Apple executive. \u201cYou need a thousand rubber gaskets? That\u2019s the factory next door. You need a million screws? That factory is a block away. You need that screw made a little bit different? It will take three hours.\u201d<\/p>\n<\/blockquote>\n

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That\u2019s because nothing like Foxconn City exists in the United States.<\/p>\n

The facility has 230,000 employees, many working six days a week, often spending up to 12 hours a day at the plant. Over a quarter of Foxconn\u2019s work force lives in company barracks and many workers earn less than $17 a day.<\/p>\n<\/blockquote>\n

And lastly,<\/p>\n

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The answers, almost every time, were found outside the United States. Though components differ between versions, all iPhones contain hundreds of parts, an estimated 90 percent of which are manufactured abroad. Advanced semiconductors have come from Germany and Taiwan, memory from Korea and Japan, display panels and circuitry from Korea and Taiwan, chipsets from Europe and rare metals from Africa and Asia. And all of it is put together in China.<\/p>\n<\/blockquote>\n

Summarizing, Chinese firms can scale up and down rapidly i.e. they have flexibility that the Chinese government and populace are willing to allow. Something that cannot be obtained stateside in whatever shape or form. The key takeaway is that it is not only scale but the willingness and ability to go either way with it. In the US, one finds that scale is directed one way towards growth but scaling down is an arduous, acrimonious and drawn out affair if it ever happens.<\/p>\n

So here\u2019s the first key to Smarter Manufacturing \u2013 Flexibility and Scalability.<\/p>\n

Technorati Tags: China Manufacturing<\/a>,Flexibility<\/a>,Scalability<\/a>,Foxconn<\/a>,Apple supply chain<\/a>,Smarter Manufacturing<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

Two recent articles, one being the retelling of another, delve into some of the reasons why Apple makes iPhones in China and by implication not in the USA. The original article was from the New York Times, How the US lost out on iPhone Work and the retelling was recounted in This Article Explains why […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3],"tags":[238,198,201,237,102,229,245,236,214,244,230,232,243,100,241,103,101,239,231,240,185,234,95,233,242,235,68,69],"class_list":["post-390","post","type-post","status-publish","format-standard","hentry","category-strategy","category-supply-chain-management","tag-africa","tag-apple","tag-apple-supply-chain","tag-asia","tag-china","tag-china-manufacturing","tag-chinese-government","tag-cook","tag-europe","tag-executive","tag-flexibility","tag-foxconn","tag-foxconn-city","tag-germany","tag-iphone","tag-japan","tag-korea","tag-rubber-gaskets","tag-scalability","tag-semiconductors","tag-smarter-manufacturing","tag-summarizing","tag-supply-chain","tag-taiwan","tag-that-factory","tag-the-new-york-times","tag-united-states","tag-usd"],"_links":{"self":[{"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/posts\/390","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/comments?post=390"}],"version-history":[{"count":1,"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/posts\/390\/revisions"}],"predecessor-version":[{"id":391,"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/posts\/390\/revisions\/391"}],"wp:attachment":[{"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/media?parent=390"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/categories?post=390"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/tags?post=390"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}