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A Tiny Screw Shows Why iPhones Won't Be 'Assembled in USA' (nytimes.com)
An anonymous reader shares a report: Despite a trade war between the United States and China and past admonishments from President Trump "to start building their damn computers and things in this country," Apple is unlikely to bring its manufacturing closer to home. A tiny screw illustrates why. [Editor's note: the link may be paywalled; alternative source.]
In 2012, Apple's chief executive, Timothy D. Cook, went on prime-time television to announce that Apple would make a Mac computer in the United States. It would be the first Apple product in years to be manufactured by American workers, and the top-of-the-line Mac Pro would come with an unusual inscription: "Assembled in USA." But when Apple began making the $3,000 computer in Austin, Tex., it struggled to find enough screws, according to three people who worked on the project and spoke on the condition of anonymity because of confidentiality agreements.
In China, Apple relied on factories that can produce vast quantities of custom screws on short notice. In Texas, where they say everything is bigger, it turned out the screw suppliers were not. Tests of new versions of the computer were hamstrung because a 20-employee machine shop that Apple's manufacturing contractor was relying on could produce at most 1,000 screws a day. The screw shortage was one of several problems that postponed sales of the computer for months, the people who worked on the project said. By the time the computer was ready for mass production, Apple had ordered screws from China.
In 2012, Apple's chief executive, Timothy D. Cook, went on prime-time television to announce that Apple would make a Mac computer in the United States. It would be the first Apple product in years to be manufactured by American workers, and the top-of-the-line Mac Pro would come with an unusual inscription: "Assembled in USA." But when Apple began making the $3,000 computer in Austin, Tex., it struggled to find enough screws, according to three people who worked on the project and spoke on the condition of anonymity because of confidentiality agreements.
In China, Apple relied on factories that can produce vast quantities of custom screws on short notice. In Texas, where they say everything is bigger, it turned out the screw suppliers were not. Tests of new versions of the computer were hamstrung because a 20-employee machine shop that Apple's manufacturing contractor was relying on could produce at most 1,000 screws a day. The screw shortage was one of several problems that postponed sales of the computer for months, the people who worked on the project said. By the time the computer was ready for mass production, Apple had ordered screws from China.
You must not know much about what goes into a modern electronics product. The phones and tablets and laptops being sold today are too small for off-the-shelf fasteners to be used. I make Nixie tube wristwatches in the USA, and I use the smallest American screw I can get to hold them together. That screw is about twice as big as the average screw in a modern phone.
The determined Real Programmer can write Fortran programs in any language.
I would guess these are not rolled screws. Precision custom screws like this can easily cost > $1 each. One set that we make costs $10 for a screw that is about .250" long
Soooo if you don't have enough screws produced locally, you just order more from China... exactly what Apple did.
When you have to do that often then it makes more sense to just assemble the product in China rather than blowing up your supply chain and incurring huge freight and logistics costs and hassles.
That kind of basic part seems like it should be easy enough to predict need of ahead of time, and cheap enough that pre-ordering a rough amount of material you might need would not cost much.
It's just an example of the sorts of difficulties that happen when you try to manufacture something physically far away from the bulk the supply chain. It's not just one component for one product - the screw is just an understandable example of the bigger problem. There are hundreds to thousands of components in the bill of materials for a typical computer and new products are being made all the time. These components are very often not made in the US because they have a high labor content so US firms aren't cost competitive on those parts. My day job is general manager of a small electronics assembly company. I deal with this every day. I don't think you even begin appreciate the problems with ordering stuff from halfway around the world for manufacturing.
It seems like lessons learned will mean that Apple will have been more careful about what they can produce locally vs. what they still need to order from China in order to assemble computers in the U.S. I'm pretty sure that is still a big goal for them.
Ordering from China isn't nearly as easy as you make it sound. I do this for a living. First off you immediately incur a 6-14 weeks of additional lead time (no they aren't going to ship it by airplane except in emergency - that costs a fortune) because it takes that long to make the product and send it on a boat across the ocean. So you end up stocking a lot of unnecessary inventory to guard against supply chain disruptions. Second, you have to have people working closely with your supplier in the foreign country or else you get serious quality and delivery problems. This adds a lot of cost and hassle. Yes there are plenty of Chinese suppliers who would think nothing of screwing even mighty Apple and Apple knows this. Third, you are grossly underestimating the advantage of having your engineers and supply chain people close to the suppliers. Problems happen and fixing them from half a world away is never easy. Fourth, when you cannot get components locally you incur a lot of currency risk. Fifth, a big part of the reason China produces so much of the world's electronics is because nearly the entire supply chain is nearby. This reduces costs tremendously.
I could keep going. If it were economically practical to assemble electronics in the US (even ignoring the labor price disparity), companies would be doing it. US companies would love to be able to buy their stuff locally but it's just not economic. I've bid on jobs where the target sale price was less than my cost of materials because the supply chain in China for electronics is that advantageous. Getting the supply chain back to this side of the pond will take decades to happen.
Couldn't they have just ordered the custom screws air-shipped from a Chinese factory or redesigned the thing to use a more ordinary screw?
Possibly but then they are adding cost to the product. You are missing the point. It isn't just ordering some specific screws. The screws are just an example of the broader problem. There are literally thousands of components with the same problems because the supply chain for them in the US has withered and it takes a long time to build it back up even when it is even possible. For high labor content work it's just not economic to make the stuff in a high wage country like the US. I do this for a living so I know. The problem is that the supply chain in China already has all this stuff figured out and engineers can easily get what they need locally over there.
Believe me if it were easy and economic to build this stuff in the US, companies would be doing it. NOBODY who does this stuff for a living (and I do) wants to deal with ordering components from halfway around the world if they don't have to.
I wonder what's so special about that particular screw. Is it a "tamper proof head" like Apple's 5-point "Torx" security screws to keep mere plebs from opening the hardware?
Don't fixate on the screw. The screw is just an example of a problem they will face over and over again. The point is that the supply chain just isn't robust for electronics manufacturing in the US like it is in China. Fixing this problem will not be easy or quick.
I "WAS" a manufacturing engineer in the 90's. Before the Gov't taxed the companies so high that paying workers and paying taxes needed to find something that could make them competitive. Sadly, that meant moving that part of the business model out of the country. Enter NAFTA, this was the loophole that companies needed to move manufacturing out of the country without paying a huge fine. Once the plant was in Mexico, namely Juarez, they were free to move it overseas without a penalty. That one screw shows how much the US Gov't had a hand in destroying the livelihood of the workers in what they call the "Fly over States. And all of you wonder how Trump got elected, look only as far as the Federal Government. And you thought they were looking out for you, ha ha ha ha ha!
America Outsourced:
Pollution
Low wages
Poor working conditions
Dangerous working conditions
Pollution
Government Subsidies.
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
Can I put you in touch with Fastnal? Cause our company uses those tiny ass-as-shit screws that are used in cellphones and laptops in our products. They have no problems getting them to either import or doing batch runs of 2000 units, we use one of their local branch offices and have yet to see a delay or missed shipment.
Om, nomnomnom...
You are wrong because tax rates have decreased both for personal income and corporate taxes. In the 80s and earlier US income taxes included brackets at 70% and higher rates on personal income for 100+ of years previously. Corporate taxes have existed since 1919, and were uniformly required by 1949. In 1951 corporate rates were actually 50.75% and typically 40%+ until 1980 when Reagan reduced them, and they they have since fallen to 20%. The decrease is what caused the problem where workers were shafted since corporates had low tax rates and even lower capital gains tax on dividends allowed for wealth to concentrate rather than be distributed to the workers who created it.
have little teensy hands, being children. That's the secret sauce. That, along with paying them dirt wages and forcing them into shoddy dorms. #Chinapitalism.
China may have been late to the party taking steps to ban child labour; but in truth, although some companies may still use child labour it is illegal in China and highly punishable. There are other countries that are far worse offenders than China.
You can blame China for a lot of things they do wrong; but they do punish people for using child labour... now.
"That's the way to do it" - Punch