Apple plans on bringing some manufacturing to US

on Thursday, December 6, 2012

Apple plans on bringing some manufacturing to USFor years, tech innovator Apple has been a major player in the offshore manufacturing trend, but that appears to be changing. In recent interviews with Bloomberg Businessweek and NBC News, Apple CEO Tim Cook revealed that the company has plans to bring more of the manufacturing for its popular products to the U.S.

In recent years, it has often proven to be financially savvy for companies to move jobs overseas, and Asia has been a popular place for electronics corporations to shift their operations. The manufacturing labor costs there are often much cheaper than they would be in the U.S., allowing companies to save money on the process.

However, offshore manufacturing does have its drawbacks for many businesses. Having facilities located halfway across the globe can make it more difficult to manage orders, deal with logistical concerns and afford higher shipping expenses. It also makes it harder for companies to keep an eye on how their facilities are operating, and can lead to public relations issues. Apple, for instance, came under scrutiny when a series of suicides at its manufacturing facility in China led to an investigation.

Slowly bringing manufacturing to the US
In his interview with Businessweek, Cook revealed that some of the components in Apple products are already made in the U.S. The processor and glass for the company's popular iPhone and iPad products are developed domestically and exported for assembly.

Cook also claimed some of the company's Mac production will also begin to shift back to the U.S. in 2013. The company will reportedly invest more than $100 million in American manufacturing facilities, though it has not yet been revealed where the plant will be constructed.

However, the company doesn't appear to have plans to bring all of its manufacturing and assembly to the U.S. any time soon. In his NBC interview, Cook claimed the American education system has failed to prepare many in the U.S. for careers in the manufacturing industry, which is why many jobs will remain in China, claiming price wasn't a large factor in that decision.

"It's not so much about the price, it's about the skills," Cook told NBC.

More than manufacturing
According to Cook, Apple has created a huge number of jobs domestically, though some indirectly.

"When you back up and look at Apple's effect on job creation in the United States, we estimate we've created more than 600,000 jobs now," he told NBC.

These jobs don't all deal directly with manufacturing. All of these positions also take into account retail store employees, researchers and even third-party app developers. The company is also in the process of creating more jobs in its data centers. Cook told Businessweek that aside from construction of a new campus in Austin, it is also developing new data centers in Oregon and Nevada, in addition to its current center in North Carolina.

An integrated process
While some corporations may outsource manufacturing and see it as merely another link in their supply chains, Cook told Businessweek he sees Apple's manufacturing as critical to the company's success.

"The truth is we couldn't innovate at the speed we do if we viewed manufacturing as this disconnected thing," he told Bloomberg. "It's integrated."

This focus on manufacturing as part of the business process could explain Apple's desire to move some of its production back to the U.S., as many corporations find they can better manage their supply chains and enjoy savings on logistical expenses when their manufacturing is completed closer to home. It remains to be seen where Apple's plant will be built and which Mac lines will be produced there, but the company is just one of the latest to start a nearshore manufacturing campaign.

0 comments:

Post a Comment

Keep in Touch and Subscribe:

Keep up to date with your Procurement & Strategic Sourcing News.

Procurement News RSS Strategic SourcerorRSS Feed
Follow GetSavings on TwitterTwitter/GetSavings
Friend Source One on FacebookSource One on Facebook