A New York Times blog this week defines a challenge many of us grapple with every day. The post, “Not Really Made in China (or the United States),” explains how many individual products are made with components from various countries, and these products represent a growing share of international trade.
“How do you decide what is an import and what is an export when imports are important inputs into many exports, and vice versa?” asks Nancy Folbre, professor emerita of economics at the University of Massachusetts, Amherst. “No company illustrates this phenomenon better than Apple, considered a virtuoso in the realm of outsourcing as well as in design.”
She contends that while iPhones are assembled in China, they are not really made in China. Instead they are comprised of components from Germany, Japan, South Korea, and the United States. Folbre writes, “Rather than exporting iPhones, China simply represents a particularly visible part of Apple’s global supply chain.”
Folbre’s piece points to the complexities of global value chains and the challenging regulatory work taken on by governments and businesses. Further, she asserts that Apple__as well as other companies like it__uses its supply chain smarts to exert significant competitive pressure.
In the blog, Folbre urges workers and consumers to pay attention to the distribution of gains from trade, which she says “matters far more than the specific countries where things are made.”
The New York Times blog article is about much more than Apple; it highlights the significance of supply chain in global manufacturing and trade. Consider the definition of global boundaries from the APICS Operations Management Body of Knowledge Framework: “In the global economy, operations management has become borderless as it touches on processes that span supply chains around the world. Global sourcing requires collaborative global planning, and the extended supply chain requires global logistics planning and execution.”
Knowledgeable supply chain and operations management professionals are the essential elements in the business equation for success—now and in the future. Therefore, it’s crucial that you stay up to date. APICS can help you.
One key resource is APICS 2013, September 29–October 1, in Orlando, Florida. Our premier conference features presenters from a variety of companies, including Coca-Cola, BASF, DuPont, and Intel. They will share valuable advice and lessons learned, enabling attendees to implement solutions back at work. You can’t get this information if you don’t attend. Visit apics.org/conference to find out more.
On a personal note: I’m deeply saddened by the loss of our friend John “Jock” Menzies, a pioneer in the logistics field. Menzies cofounded the American Logistics Aid Network (ALAN), which supports disaster recovery by engaging industry to address the unmet needs of relief organizations, communities, and people. APICS will remain a proud ALAN partner. Donations can be made in Menzies’s name at www.alanaid.org.