High-Tech Shortages

High-Tech Shortages

September 28, 2017

Article Title: Why There Are Never Enough New iPhones

Author of Article: Christopher Mims

Date of article: September 17, 2017

Source URL: https://www.wsj.com/articles/why-there-are-never-enough-new-iphones-1505649600

This Wall Street Journal article debates why high tech companies, including Apple, continue to experience shortages and delays in new products. Although this practice seems to violate basic principles of customer service, it may well be deliberate. Or at the very least, a mix of planned marketing and risk management, mingled with unplanned yield issues, complicated by the complexity of managing global supply chains. The critical bottleneck for the iPhone X, according to the article, is its OLED screen. Whether the delays are planned or not, one benefit of delayed production is improved forecasting.

Discussion Questions
1.What are the risks of delaying the delivery of the iPhone X?

Guidance: Focus the discussion on shortage costs and service levels.

2. What are the ethical implications of making deals for huge quantities of NAND memory at the expense of smaller players? How does it affect consumers?

Guidance:  The production of iPhones is restricted by the limited global supply of scarce components such as NAND memory and OLED screens.  With its purchasing power, Apple Continue reading

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Amazon’s HQ2

Amazon’s HQ2

September 28, 2017

Title of Article: Amazon plans to build second, ‘equal’ headquarters outside Seattle

Author of Article: Matt Day

Date of Article: September 7, 2017

Source URL: http://www.seattletimes.com/business/amazon/amazon-plans-to-build-second-equal-headquarters-outside-seattle/

Amazon has outgrown Seattle, and plans to build a second headquarters (HQ2) somewhere in North America. The retail giant plans to spend around $5 Billion on the new headquarters that will be an equal to the one in Seattle, with aas many as 50,000 employees. The article discusses some of the criteria Amazon will use in selecting a location for its HQ2, including incentives to offset building and operating costs.

Discussion Questions

1. What factors should Amazon consider when deciding where to locate HQ2?

Suggestions include factors that impact on employee’s quality of life, such as availability of housing, recreational opportunities, cultural events, sports teams, crime rates, educational opportunities, etc.  Cost related factors, such as cost of office space or land, cost of utilities, overall cost of living, taxes, etc.   Additionally, availability of air travel (especially to Seattle), and ability to attract talent.

2. What problems could occur with 2 corporate headquarters?

Consider what may happen when Amazon gives the opportunity for various teams to move from current Continue reading

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The 26 Second T-Shirt

The 26 Second T-Shirt

September 28, 2017

Title of Article: China Snaps Up America’s Cheap Robot Labor

Author of Article: K. Hamlin

Date of Article: August 30, 2017

Source URL: https://www.bloomberg.com/news/articles/2017-08-30/china-snaps-up-america-s-cheap-robot-labor

This BusinessWeek article describes the production of a 33¢ T-shirt by a Chinese company in the United States (US). In early 2018, Tianyuan Garments Co. will open a $20 million factory in Little Rock, Arkansas, using American-made robots which can produce a T-shirt every 26 seconds.

Tianyuan is one of the largest apparel makers supplying major brands worldwide. Rising labor costs in China have made production with robots attractive, and rapid advances in technology have made feasible the complex process of sewing. Further advances in the garment industry are around the corner.

Discussion Questions

1. Discuss the advantages and disadvantages for Tianyuan in having a factory overseas.

Could discuss tax cuts, labor costs in the US, fewer workers due to automation, consistency in output, capacity utilization, depreciable assets, capital investment, and currency fluctuation.

2. Develop a plausible worker-machine chart for the Tianyuan factory in Little Rock, Arkansas.

Groups of machines will likely be managed by 1 or 2 workers to ensure the 26 second takt time.  See Softwear Automation’s simulation of a Continue reading

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