Hagerty, R. J. (2012, December). Can Apple Really Bring Manufacturing Back to the U.S.? Retrieved from http://blogs.wsj.com/digits/2012/12/06/can-apple-really-bring-manufacturing-back-to-the-u-s/
Monday, September 23, 2013
Why does Apple manufacture iPhone overseas?
You can easily answer, “Because labor costs in China is so low”. Is this only a reason?
In the article, “New hubs arise to serve ‘Just in case’ distribution”, the author defines that a case is like a hurricane and an earthquake. I think that the short period production of millions of iPhone5ss before Apple’s announcing the new product is also a case. I researched how Apple deals with the case.
The article written by Moyer says that before releasing an iPhone, Apple headquarters changed the specification of the screen glass. A production line was also changed, due to the change of the glass. At midnight, the new parts arrived at the factory in China. Despite of midnight, workers woke up and started to attach the parts to the frames of iPhones by a twelve-hour work shift. If the report is true, I think that the flexible work shift in China enables Apple to manufacture millions of iPhones that can be sold at the same timing in the world though the new production line is unstable.
Furthermore, the article reports that Foxconn can employ 3,000 workers a night, offer them a dormitory, and include its production lines in China. Foxconn also has employed 870 engineers who supervise its production lines in fifteen days. I think that the huge labor market in China enables Apple to build quite speedy supply chain of iPhone, a product of which demand wave surges temporarily.
According to the article written by Duhigg and Bradsher, since the US does not have such a flexible, huge labor market, Apple cannot create a supply chain like that in China. The reason why Apple manufactures iPhone in China, I think, is not only cheap labor cost but also flexibility of labor market that can speedily deal with temporary increased production for “Just in case”. However, do you think that excessive dependency on flexibility of labor power causes unstable employment and breaks a sustainable supply chain?
Duhigg, C; Bradsher K. (2012, January). How the U.S. Lost Out on iPhone Work. Retrieved from http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?_r=0
Hudgins, M. (2013, February). New hubs arise to serve ‘Just in case’ distribution. The new york times.
Moyer, E. (2012, January). A tale of Apple, the iPhone, and overseas manufacturing. Retrieved from http://news.cnet.com/8301-13579_3-57363434-37/a-tale-of-apple-the-iphone-and-overseas-manufacturing/
Posted by Rempei Iwata at 6:25 PM