Why Does Apple Outsource To China - The Various Reasons
Does apple outsource to China? Of course, they do. Outsourcing is great for businesses.
Here we will discuss how apple uses outsourcing to its advantage. As a corporation and a business, it is wise to outsource the smaller tasks that take away your time from your main objectives.
Let’s go over the different types of outsourcing Apple has at its disposal.
When you order an apple, you can probably be convinced that it is an apple, a fresh apple from your local supermarket, or a fresh apple from Applebees. This is untrue.
The apples are ordered from a Chinese exporter called JSR (Jin Xuan Long). In 2010, the top 10 apples were procured from China.
In 2012, over 80 percent of the popular apples came from China.
The same thing was noticed by Mie, the world's biggest apple importer in 2011 when more than 80 percent of the apples they sold were sourced from China.
If you do not own an iPad, I really doubt you have ever seen one in person. This is because in the United States you are never allowed to travel more than 250 miles away from your local Apple store to have an iPad serviced.
Don't get me wrong, it’s great that you are not able to travel that far for your iPad, but why can’t you?
Apple does not own its supply chain. Their suppliers do. That is why you are never able to go across state lines to have your iPad serviced.
They don’t own their own planes to transport their goods, either. Their suppliers do.
Let’s just say that if you want your iPad fixed, you would have to get it fixed in California and then drive it to Arizona, the nearest state border you have.
You will probably be glad to know that Apple’s service program is so cheap that you could buy a new one for a third of the price of your old one.
Transportation can definitely be a pain to deal with, but in this case, we will have to.
Implementing these types of outsourcing is definitely cost-effective, and as a result, it helps to support your team.
Although some of you might argue with this type of outsourcing, it will be great to utilize it for a new supply chain project.
Many people would want to get rid of them because they want to be project managers, or they want to be lead designers.
These are not productive individuals, but some are hired to do these tasks, so we will see how Apple likes them.
When Apple purchases supplies or anything of the sort, they usually have a deal with an Asian contractor.
The company sells products at cheap prices and then Apple pays them at a much higher rate. This provides Apple with a cheaper alternative to buying everything from the American stock market, such as IBM, Dell, HP, etc.
Apple is the world’s largest purchaser of screws, and they make special arrangements to import these screws from China.
Apple also manufactures parts for their computer equipment from Asian suppliers. Here they will outsource everything except the construction, which they will bring in-house.
In many of their suppliers’ factories, they will receive products from many different Asian countries to assemble into a computer.
In fact, there are over 1,300 component manufacturers in the world who could provide them with products in bulk, and they still rely on local suppliers.
In 2009, Apple spent $4.4 billion with Asian suppliers. They sent $500 million of that directly to Hong Kong. And that is just the first step.
To produce electronic parts, they use lots of small factories that have a huge impact on the environment. They use hazardous materials such as sulfuric acid and cyanide to make glass for their computer screens.
The reason they do this is that they have to cut costs. Apple cares more about the process and what is right than what is good for the environment, which I respect.
Here’s an example of how big this impact is on the environment: The cost of mining is about $1.21 per lb of the primary ingredient, but the cost to manufacture the product is closer to $80.00 an lb.
Apple invests hundreds of millions of dollars in massive recycling facilities to continue to process their waste because to properly recycle the waste, you have to use a great deal of electricity.
This is one of the reasons that Apple has chosen to build its own factories.
The way Apple runs its manufacturing is absolutely incredible. I truly believe that this is the only way to do it, and it is what any of us need to consider if we want to be able to get products that are manufactured to the highest quality that they can be.
Apple runs all of its manufacturing in-house. Apple owns its factories and its own office supply warehouses.
These factories are rarely shut down, and even when they are, most of them are closed for a few days and then are reopened to produce new products.
Apple works with an Asian contractor to take care of the majority of the manufacturing, but when an iPhone comes off the production line and it needs to be packed up, a contract is sent to a factory, and the product is produced within a few hours.