What Other Scm Issues Have They Had? Why Are They Now Considering Bringing Back Some Manufacturing Back to Us?

...

For years too many American companies have treated the actual manufacturing of their products as incidental—a generic, interchangeable, relatively low-value part of their business. This is a process which is so flawed. If you created a good design, and your drawings had precision, and then hired a cheap factory and inspected for quality, it doesn’t make sense at all. Having product teams design and create products here in US, and then talk to manufacturing teams in China that share completely different cultural nuances and perspectives is detrimental to product vision execution, to maintain strong streams of communication and achieving product vision, it is a worthy to bring production back to the US.

The migration to China was a herd mentality when migrating supply chain management. There was inherent inability to see the massive total cost whereby engineers in the U.S. and factory managers in China can’t talk to each other, including the management hours and money flying to Asia to find out why the product quality wasn’t achieved. Companies are now realizing their mistake. When managers manage with a spreadsheet rather than real-world knowledge about what was actually going on in the factory and what were its possibilities, they overlook hidden costs of the erosion of skills, the loss of quality and constraints on innovation. They also miss the potential added value to customers that could be generated by designing and manufacturing things differently. Not to mention that they miss the costs and risks of an international supply chain, which is increasingly out of step with the shorter, faster product cycles. Only one or two international hiccups are needed for all the potential savings in outsourced labor costs to be eroded. Moreover, as labor becomes an ever smaller part of the overall process, labor savings become less and less relevant. As products become more high-tech, production is more complicated, and the quality, rather than the cost of labor, becomes a priority.

Another good ground for Apple to bring back manufacturing to US is for technology utilization. There are many innovative technologies : Sapphire glass, display technology, CNC, laser technology, etc, being rapidly developed and leading in the US useful for manufacturing efficiency. China’s focus is more on labor force and not on innovation. Implementing innovation tech would make production more efficient which is exactly what Apple needs. The underlying analogy is this, China’s manufacturing scene is all about mass production and massive labor utilization, not about manufacturing innovation. Typically when an industry doesn’t innovate, it eventually crashes. We have seen these live examples with Apple during its rock-bottom days, and Blackberry right now. Amongst all their good reasons, one prime reason to move manufacturing back for Apple is that they want to innovate manufacturing and be smarter about production. The current supply chain paradigm in Apple is becoming unsustainable and affecting their profit, it’ll only get worse if not addressed soon.

One last point, Foxconn has reported to have inhumane working conditions. Thus far, 18 employees at Foxconn committed suicide, It is also in the news that Foxconn utilizes underage labor. As a conscientious company, witnessing all these traumatizing events, on an ethics ground, Apple has good reason to migrate manufacturing as well.

...