Why Amazon Can't Make A Kindle In the USA

http://www.forbes.com/sites/stevedenning/2011/08/17/why-amazon-cant-make-a-kindle-in-the-usa/

by DanielRibeiro • 15 years ago

161 184 15 years ago

rbanffy17• 15 years ago

I loved the doublethink involved in "There’s no stupidity in the story. The managers in both companies did exactly what business school professors and the best management consultants would tell them to do".

When you play chess, you shouldn't optimize your strategy for short-term capture of your opponent's pieces.

aaronbrethorst• 15 years ago

But you very likely will if your rewards for playing chess are only based on the results of your next ten moves.

That's one of the key issues here: almost everyone optimizes for the short term win, because that's how they maximize their compensation. By the time the long-term consequences of their decisions are known they've moved onwards and upwards.

protomyth2• 15 years ago

yep, public companies have report cards every three months and need to show "progress".

dmethvin• 15 years ago

But the analogy to chess is another sign of short-term thinking. There is no end of the game if the company is to survive.

Company execs are optimizing for their own good. They won't be around forever, so they need an exit strategy (end game) that works out for them. If it takes the company down, well so be it. Was it a good idea for Groupon investors to take a bunch of money out of the pool in the last round of financing? You can bet they see an end to the game.

rbanffy17• 15 years ago

The end of the game is beating your competition to the next disruption. Then, you start another match.

Estragon2• 15 years ago

"Doublethink" is a bit harsh. It's probably diplomacy on the part of the author, rather than active self-deception.

commandar• 15 years ago

I don't think it's either, actually.

He's saying that, according to the MBA playbook, the executives of both companies did exactly what they were "supposed" to. The ultimate outcome was negative for Dell, and it isn't because the Dell executives were straying from current conventional managerial wisdom but because they adhered to it.

Saying "you can do exactly what the MBAs tell you to and still end up screwed" isn't doublespeak or diplomacy; it's getting straight to the heart of his overall criticism.

icarus_drowning2• 15 years ago

Yes, but I think that's a bad analogy because winning a chess game is good for you, but preserving a national infrastructure of innovation and manufacturing is good for everyone.

It can be difficult to make choices that preserve the common good at the expense of one's own short term good.

nitrogen3• 15 years ago

preserving a national infrastructure of innovation and manufacturing is good for everyone.

I don't think this is self evident (at least for manufacturing). Why should the focus be on national, as opposed to global welfare? How long before humanity reaches the point where it cares about the fates of all people rather than just a subset defined by national borders?

aspir3• 15 years ago

The Dell anecdote at the beginning was particularly surprising. Hindsight is always clearer, and the author is intentionally summarizing to strengthen a point, but I was blown away at how calculating ASUS's actions were. The whole time I read that section I was thinking to myself, "Wow, so this is how empires fall: one ill-formed relationship at a time."

v215• 15 years ago

it's worth noticing that ASUS didn't have to be scheming for the end result for that to happen - each stage involved them acquiring a bit more business, and making a bit more money. Their actions needn't have been the result of long-term thinking.

rbanffy17• 15 years ago

Which is even more perverse. The system self-destructs unless we consciously intervene.

logjam• 15 years ago

"In the long term, then, an economy that lacks an infrastructure for advanced process engineering and manufacturing will lose its ability to innovate.”

Yeah, lack of infrastructure. In my opinion that's true of every facet of the worthwhile goals of our national (U.S.) life, from good healthcare to cutting edge science to excellence in education.

Somewhere along the way that same short-sightedness the author discusses of mis-emphasizing short-term profit (e.g. "tax cuts") started bankrupting our future. Now we're reaping what we sowed. Practically every revolutionary advantage we gained over the last century at least (e.g., public health initiatives and sanitation, public education in the early 20th century; establishment of publicly funded research; the space program, the internet) were all collectively funded programs by government - by us - the collective will of a people not held hostage by short-sighted "anti-government" rhetoric.

anamax5• 15 years ago

> Somewhere along the way that same short-sightedness the author discusses of mis-emphasizing short-term profit (e.g. "tax cuts") started bankrupting our future. Now we're reaping what we sowed. Practically every revolutionary advantage we gained over the last century at least (e.g., public health initiatives and sanitation, public education in the early 20th century; establishment of publicly funded research; the space program, the internet) were all collectively funded programs by government - by us - the collective will of a people not held hostage by short-sighted "anti-government" rhetoric.

The existence of good govt spending does not imply that govt spending is good.

Right now, the potential good spending is being crowded out by a lot of dumb spending. (That's nothing new - we blew hundreds of billions on Carter's synfuels project.)

That's why public employee pension reform in San Francisco is being driven by folks who like govt. They realize that you can't do good govt spending when 20% of your budget goes to pensions.

The same is true of SS (which is bigger) and ordinary healthcare.

joe_the_user7• 15 years ago

The existence of good govt spending does not imply that govt spending is good.

Of course, government spending is neither inherently good nor bad.

But the thing to watch is how same cable of rent-seeking corporations that suck-up a good portion of what you aptly-label bad government spending also whips-up the "anti-government" mob when threatened (or simply greedy).

Why is it that an honest-to-God investor in productive enterprises like Warren Buffet can call for higher taxes on the super-rich but the criminal Koch brothers bend all their effort to oppose this? Well, lower taxes for these new American oligarchs is just one piece of their entire campaign of state capture.

wpietri7• 15 years ago

> held hostage by short-sighted "anti-government" rhetoric.

I think that's part of it, but it's not all of it.

There is a business philosophy in America, so pervasive that most people aren't even aware that there are alternatives. It's the reigning dogma of every MBA program, and the Dell story is a fine example of it.

Another example is the decades-long failure of American car companies. Bob Lutz, who spent decades in the auto industry, tells of fixing a manufacturing defect that was causing a lot of cars to break spectacularly right after the warranty (then 12,000 miles). Not only did he get in trouble for spending a lot on fixing the problem, people were furious that he blew a $50m hole in their expected revenue forecast. Almost any engineer could tell what's wrong with profiting from fixing a problem that you have created. But apparently, surprisingly few American executives can.

joshcrews• 15 years ago

Regarding tax cuts, I recommending taking another look at the history of American innovation and taxes. When I overview American history I see great innovation and economic growth from 1800 to 1930's, a period of low taxes. I see 1940's to 2010's as beneficiaries of earlier innovations and incremental improvements (but less innovation and growth compared to earlier period) and a time of high taxes.

forgottenpaswrd• 15 years ago

"Practically every revolutionary advantage we gained over the last century at least (e.g., public health initiatives and sanitation, public education in the early 20th century; establishment of publicly funded research; the space program, the internet) were all collectively funded programs by government - by us - the collective will of a people not held hostage by short-sighted "anti-government" rhetoric."

Yeah, like the Wright brothers, Edison, Tesla and Ford discoveries. Public health has nothing to do with some specific men that wanted to put filters on water pipes, like the space program has nothing to do with people that started playing with rockets when they were kids like Von Braun.

The same could be said about education, no private institution has made US better, everything of value has been created from central planning.

And never ever consider Ethernet invention having ANY role whatsoever over Internet.

Let say it clear: Everything of value is created by central planning and monopoly and despotic power over economy!!

The economy is failing because of the evil, the private and evil corporations, because the gov spending near 60% of the money that exist on developed countries, the central banks having a monopoly over the money and gov spending more money on killing that in public services has nothing to do with that.

Because we know politicians have not short term profit mindset like winning elections on a four years basis, they only have our best interest in mind.

wazoox• 15 years ago

> Yeah, like the Wright brothers, Edison, Tesla and Ford discoveries.

Amusingly enough (or sadly, depending on your perspective), the Wright brothers and Edison are particularly known for their counter-productive attempts at locking their respective markets by unfair practices that badly harmed their businesses in the long term (airplanes, DC power, cinema...).

You're pushing forward the false idea that progress depends on some great spirits. Fortunately this is untrue; weren't it for the Wright brothers and Edison, someone else would have made the very same discoveries at about the same time. In fact it's exactly what actually happened; the airplane, the phonograph, etc. were all invented independently at several places around the world at about the same time (give or leave a few months).

civilian2• 15 years ago

I hate this "America is losing greatness from losing manufacturing" argument. Our citizens don't want to work in manufacturing, and the Chinese (and other foreign citizens) are willing to do it for less. Sure, why not, they deserve it!

The world would improve if we stopped thinking in a "us-vs-them" nationalist way. Think in a global way!:

* We're helping Chinese farmers get out of abject poverty into a slightly better situation.

* We're improving their economy

* We're making cheaper goods for Americans & other developed countries, which means that it will be accessible to poorer people (which is a good thing!)

* The company will gain more profit and be able to make more innovative toys for us!

If we want to go down the nationalist root, then why don't we just outlaw imports all together? Or at least pass some protectionist tariffs?

If we did that, with the foolish misconception that it would help our economy, we would goad other countries into passing tariffs, and the whole world economy would hurt. http://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Act The Smoot-Hawley Tariff provoked that kind of response and was a key factor in creating the Great Depression.

rbanffy17• 15 years ago

But, then, why would they need you? All you end up with are companies that can't make stuff competing against companies that can.

civilian2• 15 years ago

China is making 'stuff' but they're not developing ideas or creating the software. Our strength is in management, finance, design and software development. I don't think we should shed any tears for a lost manufacturing industry-- hopefully it'll encourage more people to pursue these more intellectual careers.

dctoedt• 15 years ago

As China and India make more money, their workers will start demanding a bigger piece of the pie (we're already seeing this). Their prices will go up, meaning that, by comparison, U.S. workers will start to be a bit more competitive.

I've also seen reports that offshoring customers have been bringing back some of their work to the U.S., sometimes because of poor quality but also for tighter coupling and shorter response times.

larsberg3• 15 years ago

> Our citizens don't want to work in manufacturing

Not true among those to whom college is not attractive. There is a group of Americans that would like a semi-skilled labor job that affords them a middle class lifestyle.

I grew up in an area primarily populated with people like that, and while all of my friends are now of the BS/MS/PhD crowd, there is a huge set of people who now go on to college not because they want to but because they don't know what else they can do. Unless they are lucky enough to know somebody who can get them in as an apprentice at a union.

tptacek7• 15 years ago

Those people don't want the lifestyle afforded to Chinese factory workers, but the fact is that this lifestyle is an improvement for the vast rural Chinese underclass; this argument comes dangerously close to suggesting that we should further impoverish millions of people to improve the lot of tens of thousands of Americans.

It seems to be a simple fact that the US is structurally disadvantaged in electronics manufacturing.

hammock2• 15 years ago

There is a group of Americans that would like a semi-skilled labor job that affords them a middle class lifestyle

What job is that? Because it's apparently not (US) manufacturing

martinkallstrom• 15 years ago

I might be wrong, but I actually don't think it is as simple as that. Yes, it is detrimental with a too strong us-vs-them sentiment. But it is also true that the world is better off when every individual state is in good shape.

The author of the article argues that the ability to innovate within an industry niche disappears with the manufacturing. Correct or not, the problem they are pointing out is not that manufacturing is disappearing but that all capacity for intellectual development goes with it.

I'm all for balance, but I don't think the right way to achieve it is to cripple the stronger side of the scale.

wpietri7• 15 years ago

> Our citizens don't want to work in manufacturing.

Bullshit. Just a couple weeks ago I was talking with some people who have a family manufacturing business. They love it. Their employees love it. Their son wants to keep the business going.

Further, even if a lot of people wouldn't ask for a manufacturing job as their first choice, quite a lot of them would prefer it to unemployment, or a minimum wage customer service job, or cleaning executives' houses.

For a lot of people, making actual stuff is very satisfying. I really enjoyed my summer factory jobs, and I'm lucky that I happened to love making software more.

dotBen• 15 years ago

For a lot of people, making actual stuff is very satisfying

Yes but "manufacturing" can mean all kinds of work, and you've not elaborated as to what your friend's family manufacturing business actually makes.

With the type of high-tech electronics manufacturing the original article is talking about no one actually 'makes' anything - it's watching lines of machinery print circuit boards and solder chips onto them.

That's very different to, say, a mom-n-pop US-based hand-made toy manufacturer where people are genuinely crafting something.

gautamc• 15 years ago

==> Is it implied that since the average American doesn't like some work, America is being afforded a chance to uplift "Chinese farmers" and whole bunch of other poor people? Is it?

==> Isn't such a thought ridiculous? Such a thought, I think implies that the global economy is a kind of a neo-socialist+charitable-capitalistic kitchen whose main aim is to feed the poor and in the process fatten some of them more than the others. Is it?

==> I think that the right question to ask is not if - Amazon Can Make A Kindle In the USA? The right question should be - Is the Amazon Kindle manufacturing ecosystem truly balanced? - If not, then in the long run some parts of the ecosystem will be eliminated, so that the ecosystem finds a balance.

==> Different regions have different geographic/social/economic environments and will be better suited for some kind of work than other regions. One can not ignore these facts.

But, does amazon have a real stake in the companies that make the Kindle China/Korea? I think not. Isn't there an imbalance between what these companies gain, in terms of ability, from this ecosystem and what the rest of the ecosystem (Amazon/American) gets back?

I dont think american companies have a stake in the Chinese/Korean companies/economies that they outsource to. In return they give you low cost electronics - in process building the largest reserves of dollars in the world and building the ability to innovate themselves in the long run.

==> I wonder how digium works though? http://www.digium.com

==> There is no point in being crazy nationalist. But I don't understand why a nation with such a huge continent can't find a place where it can build a manufacturing hub that can participate in the global manufacturing industry.

The country has enough people to enable a volunteer military, but for some reason can't find people who can build a manufacturing hub? even if this was the case - haven't immigrants signed up before?

coliveira4• 15 years ago

The argument of "jobs America doesn't want" is completely false. You are assuming that all jobs in manufacturing are $10/day jobs that only poor Chinese people may want.

While there are many under payed workers, attached to these industries are thousands of high paying jobs that become part of the manufacturing environment: managers, engineers, service people, and entrepreneurs that participate in the supply chain.

For China, while it is convenient to have a large population base that works on $10/day, the goal is to create a middle class that manages these people and eventually creates new companies, while at the same time making way much more money.

pnathan• 15 years ago

For the record, out of the public (consumer) eye, there are still electronic device manufacturers in the USA.

I work for one.

tptacek7• 15 years ago

A tangent: when ASUSTEK first demonstrated their manufacturing prowess to Dell, long before they offered to take over Dell's supply chain, could Dell have acquired them?

marshray• 15 years ago

I can't think of many examples of corporations in Asia being successfully purchased and operated by non-Asians. Maybe it happens, but it seems like you'd hear about it more if it were practical.

hammock2• 15 years ago

The manufacturing comparative advantage sits with ASUSTEK, so you ought to ask that question the other way around: Could ASUSTEK have acquired Dell (on a shorter time horizon, that it). And the answer could be yes, with some sort of leverage AKA loan involved.

cjy• 15 years ago

I think it is important to keep in mind that manufacturing output has actually been increasing over the last 50 years. It is just manufacturing employment that has fallen. That is a natural consequence of becoming more productive. See: http://mercatus.org/publication/us-manufacturing-output-vs-j

The Forbes author is arguing that it is hard to innovate when all the manufacturing expertise leaves. To support this he argues that some Kindle parts are made in China, others Taiwan, others South Korea. To me this is evidence that innovation occurs at a decentralized level. Innovation occurs when companies specialize and focus on a better battery, or screen, or lens instead of a better device. Most people on HN seem to believe that small decentralized start-ups are more innovative than bigger companies. Why is decentralization good for software innovation, but bad for hardware innovation?

coliveira4• 15 years ago

The problem is not decentralization, but that all manufacturing is outside the US. The part of the process left here is the design. But what if the design is done by somebody else tomorrow? Then companies in this country will have no role to play.

derobert• 15 years ago

When you say "all manufacturing is outside the US", you have a very interesting definition of all. You may want to check UNIDO's industrial statistics, for then you'd find that the largest manufacturer country is not China, Japan, Taiwan, etc… it's the US.

patio113• 15 years ago

I live in central Japan's manufacturing hub. If you ever come visit me, and really want to return depressed, I'll arrange for us to take a tour of the company which produces most of the world's cell phone camera gaskets. (A little ring of rubber around the cell phone lens.) You very well might have one in the Japanese cellphone which came in the Chinese paper box and got stamped "Made in China" that you have in your pocket.

Every day, a couple hundred workers report to the factory. The most labor-intensive step in the process is taking a sheet of approximately 1,000 gaskets, manually removing them with a tweezer, inspecting them under a jeweler's loupe, and depositing the passes into the waiting outgoing package. When you fill it, it gets wheeled away for shipping. Your quota is 1,000 passed gaskets per hour, for which you are paid approximately 1,000 yen (at least, that was the pre-crash wage), or about $13 at today's prices.

When you say "We want our manufacturing jobs back", this is the kind of job you really want. It is easily the worst legal job I've heard of in a first-world nation. There's also practically a clock on the wall saying Time Until Robotic Arms Are Sensitive Enough To Do This Without Damaging An Unacceptable Portion Of Gaskets.

One reason that (pre-crash, anyhow) this neighborhood had a lot of immigrants is that the typical worker at this sort of factory 30~50 years ago was a Japanese woman in her twenties and that these days the job is a job Japanese women mostly won't do.

Cushman5• 15 years ago

So... that's a job that could be done by robots. Some day soon it will be.

The robots will be paid the same thing whether they run in Japan, Vietnam, Toledo, or downtown Manhattan.

Call me crazy, but why are we arguing about "manufacturing jobs" instead of building robots?

patio113• 15 years ago

why are we arguing about "manufacturing jobs" instead of building robots?

If I recall my stats correctly, the US is #2 in robots, which isn't exactly bad. (Lagging Japan, as a result of 30 years of policy decisions. Japanese government/industry put their chips down on "robots win the future" many years ago and this was not a disastrously stupid decision.)

stonemetal• 15 years ago

It is easily the worst legal job I've heard of in a first-world nation. That doesn't sound so bad. You should see the hell that is a tire factory in the US. Minimal automation, lots of poor work environment.

rhygar• 15 years ago

There are a ton of people in the US that would love to be making $13 an hour like that - if the job also came with free health insurance.

sp4rki3• 15 years ago

I'm pretty sure the patio11 did not mean that they where paid 13 dollars an hour to pluck and approve one thousand gaskets. He probably meant 13 bucks a day. A half inch gasket costs around 8 to 10 cents a piece (retail), around 5 or 6 cents in bulk by the hundred thousand or millions, which are the quantities phone manufacturers buy. At 5 cents a piece you would be making 50 bucks for each 1,000 gaskets, which you need to manufacture, box/package, and ship. You also need to pay utilities, management, equipment, marketing, and probably a whole bunch of other jobs not directly linked to actually plucking and approving gaskets. If you're paying more than one fifth of your earnings before taxes in people that pluck and approve your gaskets you're probably making no money, and most likely are loosing a crapton of dough on each shipment. Not only that, but if you're earning 13 bucks an hour, that's 2080/2496 bucks a month if you go by 8 hour days and 5 or 6 day workweeks. That's 24 to 30 THOUSAND dollars a year, which I'm pretty sure is FAR from being a poor persons salary. In some countries, that's a middle class working person's salary. Hell if they where working 16 hours a day for 6 days a week, they would be making close to 5K a month. That is so far from the reality of the actual japanese worker in a gasket manufacturing manufacturing plant, that it's no close to even being remotely amusing. In truth, it's extremely depressing.

Klinky2• 15 years ago

"When you say "We want our manufacturing jobs back", this is the kind of job you really want. It is easily the worst legal job I've heard of in a first-world nation."

How about cleaning up after old people when they mess themselves? How about any of the DVD sorting facilities at Netflix, which is practically the exact job you described? How about the massive amount of call centers we have in the US? How about almost any low level job in agriculture? I don't think your imagination is deep enough to fathom how bad a job can really be, even in a first world nation.

There are plenty of people who are willing to work or already work a monotonous or difficult job for low pay here in the US.

More investment should go into automation, but given that the world labor market makes humans so cheap(mainly due to not having the care about the workers health or safety), human labor usually wins out.

Once all these jobs go to automation, what do you do with the workers? That is then societies problem really, we'll need to figure out if there should be a social net that guides people into higher education so we have people building/repairing robots instead of doing what the robots are actually doing. Given the vested interests in the status quo, this is probably not too likely to happen in the near future.

latch• 15 years ago

I don't think you are 100% wrong, but I can't let this one slide:

How about cleaning up after old people when they mess themselves?

You know, some people actually appreciate what their parents have done and take pride (or at least sympathy) paying back that debt when the time comes.

I'm not sure that you grasp the working conditions in some parts of Asia (i live in Hong Kong). People would be willing to take the job, but they'd ask for benefits that wouldn't even compare. I don't think there are, as you say, plenty of people willing to take on these types of jobs in their present state. In fact, there are already sectors in the US that are having a hard time finding people because people have generally become too prideful. Just look at the skilled trade problem, which is way better work than what patio11 is talking about.

sp4rki3• 15 years ago

All the jobs you mention make substantially more money and I can assure you have better work conditions than a gasket manufacturing plant located in Japan's manufacturing hub. I'd rather be earning a living by means of a nursing job that pays at least 5 times (more like 10 times in the US) what a Japanese gasket plucker makes. And I get the bonus that I can feel great because even though I have to clean shit, I make someone's life more bearable and get to take care of human beings that appreciate that I'm contributing to humanity instead of rotting away any chance of developing my intellect by spending 12 hours plucking gaskets.

Also, the solution to the automation problem is not higher education, the solution is the return of the skilled laborer. You can't automate a robot to drive to a customer's house, cut open some drywall, fix a plumbing leak, restructure some electric piping to a new section of the wall, install a socket, make a report and get it signed by the customer, get payed, drive back to the company hub, and finally give you the money. Hell you can't automate a robot to make custom dragon blood forged steel swords, which we'll probably need for the zombie apocalypse. Bachelor and masters degrees are currently too easy to get to the point even a monkey could get a bachelors these days, specially if it's a wealthy monkey. The result is that GOOD plumbers, electricians, or dragon blood forged steel sword making blacksmiths are so hard to get this days because all the offspring of skilled laborers want to go to a fancy school to be doctors, lawyers, or architects, because it's all the rage to get a university degree this days.

anamax5• 15 years ago

> It is easily the worst legal job I've heard of in a first-world nation.

I've had worse, and I've had it pretty good.

sp4rki3• 15 years ago

My first legal job was in a callcenter doing inbound collection calls for 450 bucks (I live in Central America, so that's was about 200 bucks more then minimum wage at the time). It sucked. But I wasn't reprimanded or fired at the first minuscule mistake, I was being payed more money (86 bucks actually), than what the gasket person would make IF he/she worked all days of the week, and I could at least use my head to fix some of the customers problems in comparison to mindlessly shoving gaskets into a box.

I'd say my first job was shit, but it's a thousand times better than being a drone in a Japanese gasket factory. I'm not trying to be antagonistic, I'm just curious... What jobs have you had that where so bad?

quizbiz• 15 years ago

I wonder how many of us will be building platforms that build robots one hundred years from now?

rbanffy17• 15 years ago

A hundred years from now, I only hope the robots will feed me on time and keep my cage clean.

pessimizer8• 15 years ago

I'm totally flying past you here. That's not a bad job, that's a good job. I worked a Xerox Cheshire (for addressing junk mail) for $10.50/hr around the turn of the millenium for between 40 and 76 hours a week. It financed a really comfortable lifestyle at the time (I didn't have kids.) My quota was around 10,000 per hour IIRC, and my hands got a bit chewed up, but I almost always hit quota (if the machine was on my side.)

My hands are keyboard-smooth these days, but I'm always suprised when people are suprised that people make things with their hands, when they spend all day surrounded with things made with someone's hands.

About automation: That robot clock has been running since Henry Ford. Most manufacturing jobs (if not all) are a human loading a machine with material, monitoring the machine so it doesn't jam, tear itself apart on, or shred the material, then pulling the finished product which is being ejected as quickly as a humn can keep up, wrapping it, and getting it to the next machine. Every hour the machine breaks down, and the operator figures out how to bring it back up quickly, or a mechanic has to come and do a medium to full scale repair depending on the damage.

I'm not sure how magic robot arms can change that, until they can figure out how to load themselves with rubber from the truck, and how to fix themselves really quickly.

pessimizer8• 15 years ago

Related to nothing, I worked one of these bastards too: http://www.mailmarketplace.com/inserters/5250_001IN.htm. It shoves mail into envelopes so I can swamp you with useless credit card offers, retirement fund statements, and solicitations from nonprofits. Notorious hand mangler. At the time, this was the best job I had ever had.

P.S. Looking for a picture of the Cheshire brought back memories: http://i.ebayimg.com/00/$%28KGrHqF,!g0E1fPtSCr7BNeqtoSh0w~~_...

shabble2• 15 years ago

Back when my insomnia was really bad, I'd be up most of the night watching generally dull television. One of the most interesting shows was "How It's Made", which is an entirely narrated view following a camera through various production facilities for common(ish) products.

http://science.discovery.com/tv/how-its-made/ and https://secure.wikimedia.org/wikipedia/en/wiki/How_It%27s_Ma...

Most of the production is heavily automated, but there are always a few humans in the loop somewhere. In a lot of cases, it is exclusively loading the machine with some odd-shaped component, again and again as fast as they can.

Sometimes there's a bit of excitement (poorly designed safety guards or practices), just waiting to trip someone up after they zone out midway through their 12-hour shift.

I don't know what the failure figures would be like, but it's quite possible you do need that engineer on call, with his lateral-thinking brain and dexterous monkey-fingers, but otherwise, robots can do the lot, it's just a question of cost.

See https://secure.wikimedia.org/wikipedia/en/wiki/Lights_out_%2... for examples.

tokenadult• 15 years ago

I just used CTRL-F to search this whole thread for keywords. I can't believe that no one has mentioned comparative advantage yet.

http://www.wto.org/english/res_e/reser_e/cadv_e.htm

http://www.econlib.org/library/Topics/Details/comparativeadv...

http://iang.org/free_banking/david.html

http://www.unc.edu/depts/econ/byrns_web/Economicae/Essays/AB...

http://www.commonsenseeconomics.com/Readings/Comparative%20A...

David Ricardo made an underappreciated contribution to the prosperity of all humankind when he developed the explanation of the law of comparative advantage not quite 200 years ago. As long as manufacturers want to have large markets, they will sell to people who desire manufactured goods. And as long as we (whoever "we" are) have something to trade with the manufacturers, we will not lack for any manufactured good that has been invented. The United States of America is full of affordable Kindles, and people with all kinds of occupations can afford to buy Kindles if they like Kindles.

minikomi2• 15 years ago

As an aside, I found it interesting reading through te comments here how little bio-industries are mentioned as a possible way out. I got my degree in biotechnology and I must admit, there are far fewer "jobs" it leads to than being handy with, say, Photoshop or Ruby.. I wonder I it's something which will change..

cppsnob• 15 years ago

"An exception is Apple [AAPL], which “has been able to preserve a first-rate design capability in the States so far by remaining deeply involved in the selection of components, in industrial design, in software development, and in the articulation of the concept of its products and how they address users’ needs.”"

This guy is very confused. Other US-based companies selling hardware operate in this same way. To boot, he never shows that anything listed here for Apple WASN'T done in the US for the Kindle. The same laundry list of components he describes for the Kindle goes for every Apple product, every Motorola product, every Xbox 360, etc. Yet the design and software is usually done in the same way Apple does.

ansy• 15 years ago

Technically, Amazon could make the Kindle in the USA out of parts shipped in from various Asian countries even though it could not make each of those components in the USA as well.

But then, what really could be made entirely in one country? Especially when you consider each component, the raw materials, the machinery used, and so on down the line for each of those.

I don't necessarily disagree with the author that there is value to keeping a process "in house" which needs to be including in any cost savings calculations and that American companies are prone to discounting that value when making decisions. But at some point some components or steps in the manufacturing process might be necessary or optimal to leave in the hands of others whether foreign or domestic.

fredBuddemeyer• 15 years ago

if it is the zero sum game that is suggested (itself unlikely) why is this outcome bad? is it something to do with race, geography? i dont understand why anyone should be rooting for a team here instead of appreciating the synthesis that this represents.

mckoss• 15 years ago

If you remove the nationalistic bias, this story sounds like exactly the "right thing" happened to Dell and Amazon. Work migrated to where it can be performed most efficiently. This is exactly what we want an economy to do.

It's true that Dell did not increase it's ability to design and manufacture circuit boards. But that was never their core strength. I think a firm's managers should be thoughtful about what skills they want to develop internally, and freely outsource as much as they can of the rest. This article would have managers adopt a destructive NIH attitude, greatly reducing their firm's efficiency and competitiveness.

Why Amazon Can't Make A Kindle In the USA

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