A Tiny Screw Shows Why iPhones Won’t Be ‘Assembled in U.S.A.’

A Tiny Screw Shows Why iPhones Won’t Be ‘Assembled in U.S.A.’

Low cost is no longer the only reason why US companies outsource manufacturing to China.

Despite Apple’s commitment to make a Mac computer in Austin, Texas, the inability of a US supplier to mass produce screws led the tech giant to order the items from China.

This situation exemplifies the challenges facing US manufacturing. Not only is it impossible to beat Chinese labor costs, but it is also difficult to compete in terms of scale, skills, and infrastructure.


Video Spotlight: Why the iPhone can’t be made in the US


This post is based on the New York Times article, A Tiny Screw Shows Why iPhones Won’t Be ‘Assembled in U.S.A.’, by J. Nicas, January 28, 2019; and the YouTube video, Why the iPhone can’t be made in the US, by Bloomberg, June 29, 2017. Image source: (c) Ingram Publishing / SuperStock.

Discussion Questions:

1. In general, why does Apple rely on China for a large portion of its manufacturing?

Guidance: Lower labor costs and ability to produce huge quantities fast enough to meet demand. This ability stems from an abundance of skilled workers, huge infrastructure (building and equipment), and loose labor protections laws.

2. Why was the Continue reading

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Packing Light Is More Science Than Art

Packing Light Is More Science Than Art

Do you love traveling but hate carrying luggage? There might be a new product that is just right for you. Unbound Merino is a line of travel clothes (t-shirts, hoodies, underwear, and socks) that can be worn for days, even weeks without washing.

Sound far-fetched? Apparently, the merino wool apparel claimed to repel odor and sweat is very popular among Silicon Valley professionals.


Video Spotlight: The Unbound Merino Compact Travel Hoodie


This post is based on the Forbes article, This Travel Clothing Brand Cofounder Can Go Anywhere in the World with Just One Backpack, by S. Dundas, October 31, 2018, and the YouTube video, The Unbound Merino Compact Travel Hoodie, by Unbound Merino, April 24, 2018 Image source: Gregory Kramer/Getty Images.

Discussion Questions:

1. What external factors created opportunities for the development of this clothing line? Do you foresee external threats in the near future?

Guidance: Review the external factors typically involved in a SWOT analysis. A strong economy (the clothes are rather pricey), existing technology in product components and processes, a lack of competition in everyday merino wool clothing, and growth in international travel created opportunities for Unbound Merino’s business.

The most Continue reading

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Made in Italy: High Prices, but Rock-Bottom Production Costs

Made in Italy: High Prices, but Rock-Bottom Production Costs

If you think Italian luxury clothes are hand sewn by skilled workers, you are right. If you think their craftsmanship is well compensated, think again.

This New York Times investigation paints a bleak description of the working conditions of Italians working for MaxMara, Fendi, Gucci, and Louis Vuitton. Most luxury brands outsource a major portion of their manufacturing. Several factors including intense competition from abroad result in the exploitation of labor, and the multi-tiered supply chain hinders transparency.


Video Spotlight: Made in Bulgaria: Luxury Fashion Brands Move East


This post is based on the New York Times article, Inside Italy’s Shadow Economy, by E. Paton and M. Lazazzera, September 20, 2018, and the Reuters video, Made in Bulgaria: Luxury Fashion Brands Move East, by T. Tsolova and M. Kahn, June 7, 2018. Image source: Shutterstock / Nenad Aksic

Discussion Questions:

1. What are the reasons for the “sweatshop wages” given to the Italian seamstresses making the luxury garments at home?

Guidance: Reasons include high unemployment in the region, intensive competition from Asian and Eastern European labor, contractors’ questionable ethics, luxury brands claiming ignorance about a well- known problem, “cut-throat” negotiating practices in procurement, and no government-set Continue reading

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