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50% rejection rate for iPhone casings produced in India shows Apple’s challenge
- sabujp 4y agowhere does india get the raw materials and equipment to produce the casings, don't they mostly come from the same place?
- LarryMullins 4y agoProbably the same machines, but not the same attention to detail from the workers and management.
- solarmist 4y agoFrom what I’ve read about the sapphire glass Apple often finances/buys the equipment as part of the contract. This makes the contracts extremely one-sided in Apples’ favor. But I guess the answer right now is ultimately China.
- 2devnull 4y ago“Tech entrepreneur and academic Vivek Wadhwa said that it will likely take three years or so for Indian suppliers to be capable of the kind of volume production needed to make a noticeable dent in Chinese production.” I wonder how a war over Taiwan would impact that time table? My guess is that it would slow it even further. India has to know it’s holding all the cards.
- LarryMullins 4y agoIf previous world wars are anything to go by, a war with China would come with a shift into a wartime economy. Luxury consumer goods like iphones and cars would be an afterthought at best.
- bcrosby95 4y agoIn a war with a near peer, yeah, not only luxury goods but also civil rights.
- lotsofpulp 4y agoI would not describe not being able to sell goods due to lack of expertise/infrastructure as “holding all the cards”.
- Maursault 4y ago> I wonder how a war over Taiwan would impact that time table? There won't be any war if China invades Taiwan, merely devastating impact. If China were to invade Taiwan, the most-advanced chip factory in the world would be rendered “not operable,” TSMC Chair Mark Liu said. “The war brings no winners, everybody's losers,” Liu said. He said an invasion would cause economic turmoil for China, Taiwan and Western countries.[0] [0] https://www.cnbc.com/2022/08/02/apple-chipmaker-tsmc-warns-taiwan-china-war-would-make-everybody-losers.html https://www.cnbc.com/2022/08/02/apple-chipmaker-tsmc-warns-t...
- FpUser 4y agoIf China is cut off from Taiwan's most advanced tech that it can not produce on its own it might as well stop caring that the factories get destroyed.
- Maursault 4y agoFour months later...[1] [1] https://www.reuters.com/technology/taiwan-signals-its-chip-firms-will-follow-new-us-rules-china-2022-10-08/ https://www.reuters.com/technology/taiwan-signals-its-chip-f...
- FpUser 4y agoAs they say "she was asking for it". Basically they put themselves between rock and hard place. If / when the US will transplant their tech / factories to the US soil or the other safe place they might suddenly loose strong will to protect Taiwan with all their military might.
- Maursault 4y agoI think we should just move the whole island to a spot off the coast of California.
- jpgvm 4y agoThing is this is also still the really basic stuff. It's only going to get worse as they attempt to shift more complicated things. People tend to drastically underestimate the both the scale and sophistication of manufacturing in China. For certain products the only reasonable alternatives to China are going to be South Korea and Japan in the medium term as they are the only other hubs with the required sophistication in electronics, batteries, etc. However you will need to pay a significant premium over China and probably still face lower yields and end up sending said parts somewhere else for final assembly etc.
- traceroute66 4y ago> Thing is this is also still the really basic stuff. It's only going to get worse as they attempt to shift more complicated things. Indeed. And stats like that does make you kind of worry about pharmaceuticals where India is something like number two worldwide as supplier of APIs to the global Pharma industry. API = Active Pharmaceutical Ingredient, or typically described as "active ingredient" on the labelling of the pills you take. Disclaimer: I'm not making claims or insinuations here, I've insufficient knowledge of Pharma to do so. I said "makes you think" for a reason, i.e. pure speculation, probably wrong.
- jpgvm 4y agoIndustrial chemistry is not easy but it's still substantially easier than electronics manufacturing and much less reliant on well trained workforce and logistics so it's likely fine but tbh I don't have the background to know either.
- randcraw 4y agoYes, but the issue with pharmaceuticals is safety -- compliance with regulation and close monitoring of medication ingredient quality. That's something that numerous Indian manufacturers continue to have difficulty ensuring.
- passwordoops 4y agoThe difference is India's been an API manufacturing hub for a while now, so I would think the hiccups are likely out of the system at this point. Pharma is also much less manual, and has standards and guidelines like GMP, so generally easier to export. But to really understand what 50% means in the context of Apple, it would be interesting to see how long it took China to achieve such great numbers in tech manufacturing, and even seeing how long it took India to become acceptable to pharma QA standards
- LarryMullins 4y ago> He also suggested that Apple, too, will need to adapt – especially when it comes to dealing with the bureaucratic government. I can't imagine how a bureaucratic government could be the cause of a 50% failure rate for these components. More likely apathetic attitudes is the cause of both.
- logifail 4y ago> This 50 per cent “yield” fares badly compared with Apple’s goal for zero defects Q1: Is Apple QCing everything before shipping to assembly? Q2: Surely quality issues should be the supplier's problem, not [just] Apple's, and hence a zero defects target should be the supplier's goal, not [just] Apple's?
- traceroute66 4y ago> Q1: Is Apple QCing everything before shipping to assembly? Maybe they (seemingly justifiably) had sufficient upfront concerns about quality that they are sampling at a much higher rate than they would normally.
- Espressosaurus 4y agoWhen first qualifying a supplier, I expect IQC to fairly exhaustively test every incoming part. As the supplier gets better at OQC you can start dialing back your IQC. This is all fairly normal for large scale manufacturing in my experience. You want everything to meet spec, but the spec won't cover everything, and especially at the beginning the supplier may or may not even be able to meet spec in volume.
- logifail 4y ago> This is all fairly normal for large scale manufacturing in my experience Indeed. So why does the original article claim that the "problem" is due to differing attitudes of Indian vs Chinese suppliers? EDIT: Wouldn't the "problem" likely also occur if you were to switch from one Chinese supplier to another [completely unrelated] Chinese supplier?
- Espressosaurus 4y agoIt depends on how good their process control is. A low yield rate indicates poor process control, and that will vary from supplier to supplier.
- chewz 4y agoIndia is not China. And it will never compare. Chinese people are just born ingénue engineers, every and each one of them. Indians are just Indians... https://www.ft.com/content/0d70a823-0fba-49ae-a453-2518afcb01f9 https://www.ft.com/content/0d70a823-0fba-49ae-a453-2518afcb0... > Operations in India are not running at that sort of pace, said a former Apple engineer briefed on the matter: “There just isn’t a sense of urgency.” > In China, suppliers and government officials took a “whatever it takes” approach to win iPhone orders. Former Apple employees describe instances in which they would estimate a certain task might take several weeks, only to show up the next morning to find it already completed at inexplicable speed. > Operations in India are not running at that sort of pace, said a former Apple engineer briefed on the matter: “There just isn’t a sense of urgency.”
- deleted 4y ago[deleted]
- kalesh 4y agoI am an entrepreneur & a small business owner in India. I did a small manufacturing in China & was blown away by their professionalism. The article mentions - `Chinese suppliers had a totally different attitude, aiming to exceed the Cupertino company’s expectations` - this is so true. In India, most manufacturing companies or businesses are trying to sell what they have or can produce (without any attention to detail). As a result, false promises & contracts are prevalent. There are no SOP's or any organized sampling process in most Indian companies vs Chinese who keep everything very formal & organized. I never visited China & the manufacturing went perfect. In India, I personally visited the factories & still could not get the job done. All samples were rejected. Lost money & most importantly time. It's a damn mess. People seriously lack work ethic.
- satvikpendem 4y agoFrom what I've heard, China also used to be like that, sending out cheap samples that didn't meet the specification, and the manufacturers there would tell you that they'd do it correctly next time, just for the same thing to happen again. But eventually they were able to do a good job. Give it time, Indian manufacturing is simply not as advanced as China's right now but it will be if enough investment is made.
- kalesh 4y agoIt's not about being advanced. It's about keeping promises & being honest. It might take a whole generation to fix this.
- satvikpendem 4y agoThat's part of what I mean by advanced as well. Yes, it might well take a generation, it took China a generation too.
- SilverBirch 4y agoOverpromising and underdelivering is what you do when you can't meet the expectations and you need to try and get the business anyway. What's the alternative? Honestly promise a product no one wants to buy. Once you've manufactured a billion widgets you no longer need to overpromise and underdeliver. It's very similar to the silicon valley "fake it till you make it" attitude.
- KingLancelot 4y ago[dead]
- blobbers 4y agoAnyone who's read outsourced code can vouch for the similar QC problems. I work with a lot of great Indian software developers; none of them worked IN India itself; they tend to be the ones that are skilled enough to quickly realize they're able to command massively higher wages by leaving India. India, despite it's reputation as a software outsourcing location has never been able to produce exportable quality besides textiles. There are no cars or electronics, or chip fabs in this country. The author's description of the government being 'bureaucratic' is a nice way of saying corrupt, and certainly has no direct bearing on manufacturing yields. That's simply the way business is done in a largely domestic economy.
- tnorthcutt 4y ago> There are no cars or electronics, or chip fabs in this country. https://en.wikipedia.org/wiki/Tata_Motors https://en.wikipedia.org/wiki/Tata_Motors
- blobbers 4y agoAnyone want to vouch for their great experience driving a Tata car? Not exported outside the middle east and India. Looks like they sold 5 of them in Europe in 2016. https://carsalesbase.com/europe-tata/#:~:text=Tata%20cars%20have%20only%20been,the%20pick%2Dup%20truck%20Xenon https://carsalesbase.com/europe-tata/#:~:text=Tata%20cars%20....
- ilrwbwrkhv 4y agoThere are scams at every single level in the Indian system. Everybody wants a cut and some extra to do their job. It is maybe one of the worst places to manufacture in the world. I know Apple needs to diversify but Vietnam and other such countries might be a better fit. The work ethic is severely lacking in India.
- randcraw 4y agoSimilar difficulties pervade the supply chain as it passes through India, where intermediates expect to 'take a taste' of the product's value. Just try to personally carry new electronics into the country without greasing a palm or two.
- solarmist 4y agoNot sure how this could apply to Apple. They’re ruthless in their supply chain costs and tolerances.
- jhatax 4y agoHow does your personal experience with carrying new electronics into the country apply to broader supply chain difficulties? You don’t have to “grease a palm or two” to carry new electronics into the country if you are willing to pay the lawful customs duty / tax. As you cast aspersions on others who might be corrupt, please think about your collusion / readiness to bribe and what that says about yourself.
- blntechie 4y agoIf you are within customs rules, you don't have to pay anything. Else pay the right duty based on the original invoice you should be carrying with you. I have taken TVs, laptops, iPhones, game consoles and have never been bothered by customs.
- onion2k 4y agoI heard a story about a business that worked with a Chinese chip manufacturer once. They ordered 10,000 of a particular microprocessor and instructed the company that they would accept a maximum of 1 faulty chip in 250. When the order arrived there were 10,000 chips, and an extra little bag with 40 more chips in it. The packing note said that they'd sent the faulty ones separately but weren't sure why they were needed. It's likely apocryphal but having worked with some Chinese manufacturers I like to believe it.
- betaby 4y agoThat joke is from 80s and Japan.
- tguvot 4y agoi am pretty sure that origin of this story is about Japanese semiconductor companies in 80s. I saw it numerous times over the years
- deleted 4y ago[deleted]
- delecti 4y agoWhen I heard the story a decade or two ago, it was Ford buying screws or bolts or something from a Japanese manufacturer.
- kapilkaisare 4y agoI heard this story some 20 years ago, only the manufacturers were Japanese. It's probably apocryphal.
- neilv 4y agoMy layperson's impression is that Apple has very demanding standards for iPhone manufacturing, and I had some questions: * Do contracts like this provide good metrics for a manufacturing concern aspiring to that level of capability? * How transferable are the capabilities needed to make an iPhone casing on-budget with low defect rate? For example, does it get you 1/4 of what you need to make a touchscreen (e.g., logistics management, worker process culture, leadership)?
- FpUser 4y agoA few years ago I watched an interview on youtube. Some CEO was describing doing business with India and China. Yes for China it was "can do, want to do, will do" attitude and he was generally happy. Indians - not that much. I will try to find the interview and post a link later. His description of doing business in India was a gem to watch
- miguelazo 4y agoSounds like the "decoupling" is off to a great start! Reminds me of my experience at companies with outsourced IT support.
- flerchin 4y agoSo a 50% acceptance rate? Give it time.
- firstfewshells 4y agoThis is like comparing the code written by an experienced 20 year veteran to the code written by a fresh graduate. Give it time, India will catch up. Lot of people in the comments taking a dig at the work ethic of people in India when most of them will cry a river if asked by their employer to RTO 2 days a week.
- rocknor 4y agoSeriously, it has become a pattern now in every thread related to India. Really shows how HN techies are clueless about real world trends and live in their small bubbles.
- solarmist 4y agoEither they will adapt to working with a demanding global company or they won’t. Apple won’t accept any other outcomes. And they have the leeway to abandon projects this size easily. And if they don’t; it would be very damaging to India’s reputation (and GDP) for decades. I feel like they’ll figure out how to make it happen.
- 8n4vidtmkvmk 4y agoApple might have the resources to make it happen. Anyone else probably doesn't want to hand-hold and threaten for years until they get it right.
- deleted 4y ago[deleted]
- ak39 4y agoA few "give it time" replies is emblematic of the culture of "chalega" ("it will do") in Indian commerce. This is hardly what Apple will tolerate.
- ezekiel68 4y agoI predict this rate will fall much lower over time (assuming Apple sticks with the effort there).
- MPlus88 4y ago"It’s likely that similar issues will arise with new Apple suppliers in other countries too." Not at all Apple. Move to Vietnam and you can duplicate the success you have in China. Indians are only good at talking a good talk.
- rocknor 4y ago> Indians are only good at talking a good talk. Citation needed.
- MPlus88 4y agoAngela Saini in her book "Geek Nation: How Indian Science is Taking Over the World" bragged that India is a up and coming scientific superpower. That book was published a decade ago.
- rocknor 4y agoWhile I somewhat agree that progress has been slow, a decade is hardly anything considering the scale of a country like India.
- hobabaObama 4y agoOne person's speculation is a citation now?
- _23sd 4y agoI don't think problems like this were unexpected, everyone knows India's manufacturing sector is less mature and not hyper-competitive like China's. Companies like Tata especially are going to be cautious to a fault about changing processes or spending a lot of money on improvements, because that attitude is what made them successful in India so far. The question is, will this new interest from Apple and others allow the country's electronics industry to grow and see the more capable businesses outcompete the rest?
- kamakazizuru 4y agoThis is an article that paraphrases another article from the Financial Times (https://archive.is/iuXAm https://archive.is/iuXAm) both of which lack any real sources or facts from Apple themselves. The only people quoted are a random Bain consultant and Vivek Wadhwa who basically shows up with an opinion whenever anyone says "India" - regardless of whether he actually understands the industry or not. None of this is to say that the problems might not be real, but bear in mind that China literally started producing electronics in the 80s, a 40 year headstart. And even then, until the early 2000s even in India Chinese goods had the reputation of being low quality, and for good reason. It takes years of experience on multiple levels to achieve the level of production that Apple targets. But it's not unachievable, even in India. The country has pulled this off in other sectors - IT, Aerospace, Automotives and Pharmaceuticals to name a few. This is HN so the moment I say IT and India in the same sentence a megathread of outsourcing woes will start to form. But Tech in India is much more than outsourcing for the last 2 decades - solid tech companies serving global and local markets like Freshworks, Zomato, Zoho, BharatPe, RazorPay, Chargebee etc have emerged. Apple is big enough and has sufficient resources to have known that manufacturing in India will have a learning curve. It's not like they sent a team of 5 engineers on a plane and told them to go get it built. Apple has been operating in the country for well over a decade now - it's only just starting to scale things up on the production side. This will also pass.
- nerdbert 4y ago> bear in mind that China literally started producing electronics in the 80s, a 40 year headstart Pretty sure Indian electronic manufacturing didn't start with this Apple project.
- kamakazizuru 4y agoat this scale and complexity it's definitely one of the earlier projects. Apple does almost nothing "off the shelf" - tools, processes and often even materials are engineered to their specific needs. That's different from the more lego like manufacturing that most electronics require.
- kepler1 4y agoI think there's something challenging to put my finger on about India, which is something like: "When you have an overall country atmosphere where you (even if you are conscientious and care) think others are not conscientious and do not care, then you will come to not be conscientious and care either." So there is an effect where enough people disobey rules or lack standards, that eventually no one follows the rules. Traffic is ridiculous because no one obeys the rules, manufacturing is subpar because no one thinks anyone else will care (or will put up with shoddy deliveries). And this is not some racist / cultural prejudice. It is totally changeable. The evidence I have here is that people from India, when living in the US, completely adapt and become "positive rule-wanting people". There is something about a critical mass of rule-breakers that sends a system into a negative spiral. As others said, probably China was like that too at some time in the recent past. And even the US was (or might become) this way. The opposite effect is also in force: when you live in Japan, for example, even as a visitor, and see that no one is littering on the public streets, even when they do not provide trash cans, you don't litter either. But let a certain viral % of rule breakers take hold, and if your group culture does not value what is being broken, you can descend into a loss of discipline. Again, this is not some prejudice -- it is a human factors / malleable / totally changeable thing. But it will take decades I think. And have lots of forces trying to stop it from improving. Sometimes I think you need to create an isolated bubble where enough people agree and see how it can work, to propagate it elsewhere. Otherwise the forces of mediocrity pull you back down into chaos.
- blueblisters 4y ago> There is something about a critical mass of rule-breakers that sends a system into a negative spiral. Yes this is classic game theory at play. And it’s true for all “low-trust” countries with shoddy rule of law. It doesn’t take decades to change behaviour though. I have seen first-hand traffic behaviour improving in my city when cameras were installed at every road intersection and fines were automatically sent to rule breakers.
- kepler1 4y agoWell, the part that takes decades is where the citizens will behave even when there is no camera present.
- tristor 4y agoUnsurprising for anyone that has done business in India. This is not a dig on Indian people, but the society they operate in is incredibly incredibly corrupt, on a scale which is basically unthinkable to anyone who hasn't been directly exposed to it. I cannot imagine doing business of the precision that Apple is trying to achieve in India. There are many other lower precision arrangements that can be worked out in India, but something like an iPhone seems impossible without a complete sea change in how Indian society operates at every level. Anybody who has done business in India is never surprised by the number of spam, scam boiler rooms, and other nefarious global criminal organizations operating in India. It's all part of the same pervasive corruption within Indian society.
- solarmist 4y agoI had the same impressions of China 30 years ago too. Isn’t doing this kind of thing how you start to reform things at least on the business levels? Apple will absolutely get its way even against the Indian government. And if they really can’t they’ll abandon the country which would absolutely have a huge negative impact on Indias economy.
- tristor 4y ago> Isn’t doing this kind of thing how you start to reform things at least on the business levels? Yes, absolutely. It's a slow, difficult path, however. Without the right incentive structures, there's no reason for a society to change to avoid corruption.
- solarmist 4y agoCompletely agree.
- panda88888 4y agoI agree with the huge negative impact if Apple abandons the effort. “If even Apple can’t do it, who can?” will be the new meme.
- Barrin92 4y agoAs the saying goes, Americas worst ideas are always bipartisan. The whole decoupling from China hysteria is going to cause significant harm to consumers and people vastly underestimate how complex manufacturing at the scale, quality, and price is that China built out over the years. There's an incredible amount of tacit knowledge in industrial processes that cannot easily be replicated, it takes a long time to develop.
- MPlus88 4y agoIndians software programmers are just as shoddy. The only difference is that it is much harder to see software quality than hardware quality. In hardware you can easily spot the quality by looking at the fit and finish and whether things fit together nicely. In software it's just code and the quality only manifest itself in buggy and hard to maintain software, which can be years later.
- downvoteme1 4y agoSorry but I am a bit naive here but when Apple asks a company to manufacture a part , do they also enlist the steps in the machining process that goes in to manufacture that part Or Do they just give a finished sample to the factory and ask them to figure it out on how to manufacture this part. If it is former, then is this Indian company skipping some steps in the manufacturing process?
- wheelinsupial 4y agoI'm not sure how Apple does it, but when I was working in manufacturing we were not told what steps to use or given finished samples by the customer. In general, there is a quote phase before the contract being awarded. In this phase, you're given a blueprint / shop drawing with tolerances, 3D model, and any other specifications that need to be satisfied (e.g., material type, surface finish). If anything is missing, you can submit a request to get the engineering team to update the documents. If you give someone a finished part, it misses so much of the information that's necessary to check the parts. There is a saying, "build to print" because the print contains the key info and is including in the contracts. It's up to you to determine how to produce the widget. You put forth your quote based on your costs, the material costs you can get, and you factor in your production yield. The article and the Financial Times article they are citing are light on details. It's not clear if this is an issue with production, inspection, or what exactly is going on. Usually there are some ramp up issues with launching a new process or production line, so challenges are expected. But 50% rejection is huge. I assume the "casings" being referred to are the back housing / surface of the phone, which is highly cosmetic. If that's the case, the rejection could be for cosmetic issues. It could be related to not hitting the correct tolerances. There are lots of reasons, but the article doesn't really give these details. It's also not clear if every second part is being rejected or if the first half of the batch is rejected or if there are other patterns to the rejections. Could be issues with setup, operation, inspection, or material handling.
- blntechie 4y agoWeird cultural attacks and criticisms here. I'm sure everyone here started as a Principal Engineer calibre engineers straight out of college. It will be a fair criticism if this same factory is having same quality output 2-3 years down the line.
- tinus_hn 4y agoApple isn’t stupid, they have done this before. They’ll just have some of their own guys run their line so people aren’t cutting corners.