In the recent report from the New York Times titled “How US Lost Out on iPhone Work” the newspaper provides us in fantastic detail as to why Apple outsources iPhone production to China.
So what is the reason behind this?
You’d assume it’s low-cost, unskilled labor, however, there is much more behind Apple’s decision to relocate their production to China, than simply cutting back on paying wages.
New York Times, speaking to many people both inside and outside Apple, presented various examples where Chinese manufacturers and suppliers turned out to be much more versatile and productive than their U.S. competitors.
Jennifer Rigoni, Apple’s former Worlwide Supply Demand Manager stated “They could hire 3,000 people overnight. What U.S. plant can find 3,000 people overnight and convince them to live in dorms?”
Another former high ranking Apple executive stated, “The entire supply chain is in China now.” You need a thousand rubber gaskets? That’s 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.”
An additional crucial advantage for Apple was that China provided engineers at a scale the US couldn’t match. Apple’s executives had projected that around 8,700 industrial engineers were required to manage and guide the 200,000 assembly-line employees ultimately involved in producing iPhones. The organization’s analysts had predicted it could take as long as 9 months to locate that number of experienced engineers in the US.
http://www.youtube.com/watch?v=t1uDYAHkkuU
This article is a great read. Follow the link below if you would like to read the article in its entirety.
[via The New York Times]
