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“can scale up and down faster”

Apple, America and a Squeezed Middle Class @ NYTimes.com. A giant article worth reading – below, some things to think about for anyone who makes things…

“Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice,” said Betsey Stevenson, the chief economist at the Labor Department until last September. “That’s disappeared. Profits and efficiency have trumped generosity.”

…a current Apple executive said. “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.”

For technology companies, the cost of labor is minimal compared with the expense of buying parts and managing supply chains that bring together components and services from hundreds of companies. For Mr. Cook, the focus on Asia “came down to two things,” said one former high-ranking Apple executive. Factories in Asia “can scale up and down faster” and “Asian supply chains have surpassed what’s in the U.S.” The result is that “we can’t compete at this point,” the executive said.

Another critical advantage for Apple was that China provided engineers at a scale the United States could not match. Apple’s executives had estimated that about 8,700 industrial engineers were needed to oversee and guide the 200,000 assembly-line workers eventually involved in manufacturing iPhones. The company’s analysts had forecast it would take as long as nine months to find that many qualified engineers in the United States. In China, it took 15 days.


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3 Comments

  1. It’s a question that really cuts. There have long been maker movements in America. In my dad’s day you bought a band saw and made jigsaw puzzles. (Good) wood was cheap, and heavy machines weren’t too expensive.

    The modern iteration, based on small, easily shippable electronics, both recognizes higher scarcities and relies on that same Chinese production engine.

    I mean, how many were not impressed by the Bag o’ LEDs you can get on EBay?

  2. http://www.adafruit.com/blog/2012/01/22/can-scale-up-and-down-faster/

    Ok, so we get the message of this article,

    http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?_r=1&pagewanted=all

    Asia is the leader of large scale manufacturing. This article focuses on the electronics industry.

    notes:

    “Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice,” said Betsey Stevenson, the chief economist at the Labor Department until last September. “That’s disappeared. Profits and efficiency have trumped generosity.”
    (a)this was creating jobs for the sake of creating jobs.

    “…a current Apple executive said. “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.”
    (b)this is focusing on making a product, not influenced by political distractions

    “For technology companies, the cost of labor is minimal compared with the expense of buying parts and managing supply chains that bring together components and services from hundreds of companies. For Mr. Cook, the focus on Asia “came down to two things,” said one former high-ranking Apple executive. Factories in Asia “can scale up and down faster” and “Asian supply chains have surpassed what’s in the U.S.” The result is that “we can’t compete at this point,” the executive said. ”

    “Another critical advantage for Apple was that China provided engineers at a scale the United States could not match. Apple’s executives had estimated that about 8,700 industrial engineers were needed to oversee and guide the 200,000 assembly-line workers eventually involved in manufacturing iPhones. The company’s analysts had forecast it would take as long as nine months to find that many qualified engineers in the United States. In China, it took 15 days. ”
    (c)Other countries are set up demographically and geographically to make efficient use of manufacturing supply chains and labor for mass production in
    shorter time spans. They have the resources and control mastered.

    Other governments support and motivate a national pride towards production and manufacturing versus individual financial gain (very debatable) and have the qualified work force ready. Some governments are better at a growing a service economy.

    It seems that Asia is the only place to build fast moving products in great numbers at a price that makes them affordable.

    What does that leave us, the U.S. ? In the technical field; programming? software development?

    So here is a follow up question , if you will:
    Multiple choice, no correct answer(s) at this time

    What is the United States better suited at producing?
    What ones will grow or shrink?

    (a) legal professionals
    (b) Doctors
    (c) political parties/ politicians
    (d) health care systems
    (e) financial/credit systems
    (f) welfare systems
    (g) an up to date infrastructure
    (h) discourse
    (i) non-profit organizations and exemptions(too many to list)
    (j) Research and development
    (k) Political Action Committees
    (l) an affordable education system
    (m) a chaotic tax code (AKA red tape)
    (n) regulations
    (o) benefit packages
    (n) small businesses/manufacturing
    (p) artistic expression
    (q) agriculture
    add your own
    I’m poking fun at the USA, this is who we are. A diverse culture.
    Asia has it’s problems too, and no telling where they will be after 15-20 years.

    No doubt though that hobbies should be encouraged as they were in past.They are the first step in education of the trades. Have they been displaced by dismissing them as nonsense as they have no social redeeming value? Personally speaking, a home with out a work bench is not a home.

  3. Dave Winer, a (controversial) software developer, had an advice that I always at least consider in these things:

    “Zig when they zag.”

    The idea is that there will always be trends and competitors who are bigger than us, but we don’t have to match them move for move.

    The small-shop hobby electronics companies in America are certainly not going toe to toe with the Chinese LED factories. They are zigging …

    I do kind of worry that makers and small fabs may not be as big or as lasting as optimists hope (reminds me too much of the early, heady VR days), but it is good work when you can get it.

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