MBA 320-Apple Goes Global It wasnât long ago that products
MBA 320-Apple Goes Global It wasnât long ago that products CASE INCIDENT 1 Apple Goes Global It wasnât long ago that products from Apple, perhaps the most recognizable name in electronics manufacturing around the world, were made entirely in America. This is not so anymore. Now, almost all of the approximately 70 million iPhones, 30 million iPads, and 59 million other Apple products sold yearly are manufactured overseas. This change represents more than 20,000 jobs directly lost by U.S. workers, not to mention more than 700,000 other jobs and business given to foreign companies in Asia, Europe, and elsewhere. The loss is not temporary. As the late Steven P. Jobs, Appleâs iconic co-founder, told President Obama, âThose jobs arenât coming back.â At first glance, the transfer of jobs from one workforce to another would seem to hinge on a difference in wages, but Apple shows this is an oversimplification. In fact, paying U.S. wages would add only $65 to each iPhoneâs expense, while Appleâs profits average hundreds of dollars per phone. Rather, and of more concern, Appleâs leaders believe the intrinsic characteristics of the labor force available to them in Chinaâwhich they identify as flexibility, diligence, and industrial skillsâare superior to those of the U.S. labor force. Apple executives tell stories of shorter lead times and faster manufacturing processes in China that are becoming the stuff of company legend. âThe speed and flexibility is breathtaking,â one executive said. âThereâs no American plant that can match that.â Another said, âWe shouldnât be criticized for using Chinese workers. The U.S. has stopped producing people with the skills we need.â Because Apple is one of the most imitated companies in the world, this perception of an overseas advantage might suggest that the U.S. workforce needs to be better led, better trained, more effectively managed, and more motivated to be proactive and flexible. If U.S. (and western European) workers are less motivated and less adaptable, itâs hard to imagine that does not spell trouble for the future of the American workforce. Perhaps, though, Appleâs switch from â100% Made in the U.S.A.â to â10% Made in the U.S.A.â represents the natural growth pattern of a company going global. At this point, the iPhone is largely designed in the United States (where Apple has 43,000 employees); parts are made in South Korea, Taiwan, Singapore, Malaysia, Japan, Europe, and elsewhere; and products are assembled in China. The future of at least 247 suppliers worldwide depends on Appleâs approximately $30.1 billion in orders per quarter. As maker of some of the most cutting-edge, revered products in the electronics marketplace, perhaps Apple serves not as a failure of one country to hold onto a company completely, but as one of the best examples of global ingenuity.Question?How could managers use increased worker flexibility and diligence to increase the competitiveness of their manufacturing sites? what would you recommend?