January 22, 2012 6:28 pm
An article in the New York Times (Jan 21, 2012) describes Apple’s global supply chain for the iPhone with suppliers from Germany, Taiwan, Korea, Japan, Europe, rare metals from Africa and Asia and assembly in China. The article highlights the ability of assemblers in China to scale quickly (adjust to screen changes in the iPhone within 96 hours with 8,000 employees ready to work immediately), the availability of over 8700 engineers to guide assembly and the capacity expansion in anticipation of orders subsidized by the Chinese government. Is Apple’s required supply chain capability far more than cheap labor that would be difficult to replicate within the US ? Is the cost of establishing such supply chains in China reasonable because of specific Chinese policies or the capability of Foxconn, the assembler ? Should social costs of these supply chains be the responsibility of Apple or the sovereign country of the employees ?
Posted by aviyer2010
Categories: Global Contexts, Supply Chain Issues
Tags: Capability, China, competition, Cost, Global, Imports, Infrastructure, manufacturing, Suppliers, Supply Chain
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How does the Chinese government subsidize expansion? Is it by investing in PP&E or inventory?
By Kyle Harshbarger (@KyleHarshbarger) on January 23, 2012 at 12:48 pm
Kyle: The claim in the article and other sources I have read suggest that the Chinese govt covers the risk – plant construction, equipment etc. I am not sure about the inventory – but if it is raw material it is probably easier to deal with. Financing costs are low as a result – in a study I did of the Chinese auto component industry, energy costs etc are also low.
By aviyer2010 on January 23, 2012 at 2:56 pm