The high temperature of 38 degrees Celsius is scorching Ganjibrum District, which is the "City of Thousand Temples" in India.
The horns on National Highway No. 4 are endless, and the car is driving by quickly, always causing dust to spread. What's worse is that the rainy season has not come yet, there is no vitality on the loess on the roadside, and the buffalo sits in fatigue. An uneasy and despair filled the air. After an hour of bumpy ride, factories without signs and rows of container trucks began to appear on the left. We did not see the huge signs, but we had entered a mysterious base and witnessed a special moment.
Apple's high-end phone iPhone X series is about to go out of China. In August, mass production was carried out in this thousand-year-old ancient city.
Ganjibrum is one of the seven major Hindu cities. It was once the capital of the Parava dynasty that ruled Southern India from the 3rd to 9th centuries AD, and many temples described by ancient verses are left behind. On the eve of our arrival, the ancient city had just dug up a statue of the god that had been deep in the water for 40 years. Because it was to be moved to land, the city was closed for 48 days and vehicles were not allowed to enter and exit at will.
Apple’s iPhone really wants to be produced in this environment? There are thousands of electronic components in a mobile phone, involving more than 200 suppliers. Once a component is short of, it cannot be shipped. The complexity of the supply chain is much higher than that of the shoe and textile industries.
Getting goods thousands of miles away has become normal! Parts are transported and then taken by boat, across the Gulf of Bangladesh. The delivery time is 1 day to change 1 week
Now, Apple is determined to launch this Long March. Is this migration a disaster or an opportunity for Taiwanese businessmen?
This was once a factory that helped Nokia produce. In 2014, Foxconn sent out a lot of local Indian employees because Nokia closed its factory. At that time, there was a serious protest and employees refused to close the factory, and the relationship between the two sides was tense. In 2016, Hon Hai Group returned to India and first chose to set up a factory in Sri City, 3 hours away from the old factory area.
Now, the iPhone, which was produced in the old factory, is already on the production line, with about 2,000 employees. Next to the factory, crane workers are still busy building the components warehouse of Xiaomi, a mobile phone brand. Foxconn is also here to help Xiaomi produce mobile phones sold in India, with the number of employees reaching 10,000. This is its secret base to assist Xiaomi in becoming the leader in India’s mobile phones. A Hon Hai Group executive said: Xiaomi loves us so much! Without us locally manufactured, they cannot meet the Indian market. They want 1 million units, and we will make 1.1 million units to wait so that Xiaomi can quickly respond to market demand.
But the biggest difference from Foxconn's Shenzhen Longhua factory is that within a radius of 100 miles, there are no groups of components factories gathered, and even the group's own connectors, mechanisms, etc. have come.
Most of the components and semi-finished products of Foxconn India factory rely on Guangdong, China, a transportation distance of 5,800 kilometers. These parts have to be shipped on a boat and crossed the Gulf of Bangladesh. After about one week's shipment, it will take a boat to reach the Port of Chennai, the second largest port in India. It will take about an hour to get to the park from Chennai. Even Chinese battery factories that have set up stations in India must come from Noida, southeast of the Indian capital New Delhi, 2,000 kilometers away, to the southeast of the Indian capital, New Delhi.
was changed to the design that day, and the production line immediately followed. Now the supply chain has not followed, and the risk of chain breakage soared
iPhone's India Long March sounds inefficient at first glance! The time from order to delivery of parts is extended, and the delivery time that can be completed in one day is extended by more than 7 times. An international brand manager who set up a factory in India said that the biggest challenge is that when the assembly plants move factories, many supply chains have not yet been kept up, and the supply end to the production end becomes longer.
In the past, Apple's supply chain in China was almost within a 24-hour drive. Once, Apple changed the iPhone screen design at the last minute, and the new screen panel arrived at the Chinese factory at midnight that day. A foreman woke up the 8,000 workers who were sleeping soundly in the dormitory. Each of them gave a piece of biscuit and a cup of tea, and they could be in place within half an hour, and started working for up to 12 hours, embedding new screens onto their phones. Apple founder Jabers once said that the reason why the iPhone is not assembled in the United States is not the cost, but the rapid production speed of Asian factories and can have both economic scale and flexibility.
In 2012, Apple tried to build a factory for assembling Mac computers in Austin, Texas, USA. According to the New York Times, when assembling the computer, people realized that the supply of screws needed was insufficient. In the past, in China, if parts were short of, they could be supplied on the same day, but in Texas, nothing would work. Eventually, a screw made this American-assembled Mac delayed its launch for several months.
Copy the Chinese set to death! I pick up and drop off thousands of workers home every day, and avoid the scale thinking. India is a factory accommodating person
Will the above-mentioned risk of chain breakage be staged in India? At present, the supply chains of Apple and Xiaomi are not exactly the same. If Apple still wants to use the original supplier, it will inevitably go through a transition period. This may be the reason for this production line to be small-scale production. According to rumors in the Indian mobile phone brand circle, Hon Hai Group originally planned two production lines for the iPhone X series in the early stage, but now it has only opened one first, which means that the production capacity of only about 60,000 units per month, which is less than one-tenth of Xiaomi.
There are also risks of the Long March, and the logic of managing factories in the past had to be completely changed. At around 1 o'clock at noon, at the entrance of the factory, employees got off the white transportation vehicles in batches. More than 95% of the women in the factory were young, wearing traditional Indian clothing saris with rich colors such as goose yellow, bright red, peach red, sky blue, etc. Whenever the shift time is delivered, people in the park joke that they can see "Three Thousand Beauties". We asked the people next to us: Why do they all take buses? Why is there no scale like Foxconn's Shenzhen Longhua Factory: the self-built employee dormitories alone had more than 30 buildings, a row of food streets, banks, post offices, and hospitals... All food, clothing, entertainment, housing and transportation are included, making it a town with more than 300,000 people.
But the locals told us, don’t think about copying China! It turns out that although India is a country with a population of more than 1.3 billion, there are 22 officially recognized languages alone, and even the words are different. Going out of the house to another state may be like going abroad, and you can't understand or understand other languages. Therefore, Indians lack mobility. Unlike China, the vast majority of farmers and workers can travel thousands of miles to work in the city, and the city has abundant manpower supply.
Wu Hebin, director of the Taiwan Trade Association's Office in New Delhi, gave an example: In India, it is necessary to accommodate workers, and we must first investigate how much manpower is available in the place. Nokia had painful experience back then. They were too large, which led to the recruitment distance of more than 100 kilometers. They had to send transportation vehicles to 100 kilometers away to carry workers every day, which was very expensive. Here, it is difficult to build a factory with 20,000 people working. If the factory scale of hundreds of thousands of people in China is brought to India, it will be safe.
India strike is the norm. If Guo wants to patrol the factory, he has to wait for the workers to protest
or even. News of India strikes are common. It is said that once Hon Hai Group founder Terry Gou was going to inspect the Indian factory, but the local factory was on strike, and employees could only ask Guo if he could come again after rescheduling. However, Apple's journey has no way back, and there is more pressure from manufacturing in India than returning to manufacturing in the United States.
Now, Apple is approaching saturation in the Chinese mobile phone market, and coupled with the friction between China and the United States, it is not good for the iPhone. According to statistics from market research firm Canalys, the annual decline in iPhone shipments in China in the first quarter of this year was as high as 30%. In comparison, Huawei has grown by 40% against the trend. From JPMorgan Chase to Citigroup and other brokerages, Apple's financial report revenue forecast this year.
However, facing India, the world's most promising mobile phone market, the Apple market cannot even rank in the top ten. The high-end iPhone sold locally is almost the most expensive in the world because it has to add 20% tariffs. Taking the iPhone XS as an example, the Indian official website quotation starts at 35,000 yuan, which is higher than the average income of Indians in half a year.
Last year, South Korean President Moon Jae-in also invited Indian Prime Minister Modi to participate in the opening of Samsung's construction in India, which is known as the world's largest mobile phone factory. The friendly relations between bilateral relations, and Samsung also announced that it would manufacture advanced flagship models Galaxy S9 and Note 9 in India, both deepening the crisis of Apple's marginalization.
A Taiwanese businessman who has been in India for many years and is familiar with the mobile phone industry said that Apple's development in India in the past three years has not gone smoothly. Apple has opened direct stores in major cities around the world, and has never been able to display stores in India because the Indian government is very committed to Apple's principle of local procurement of parts, and iPhones must have more than 30% of local procurement before they can be released. Even if Apple set up its first overseas R&D center in India, the government still rejected it. This time, Apple handed over the high-end iPhone to Hon Hai locally assembled and promised to continue to bring it into the relevant supply chain, Apple has confirmed that it will open its first direct store in Mumbai.
One factory, change to a direct store; use a factory, change to a market. The attitude of the Indian government is a microcosm of the future demonstration of protectionism in countries.
is scattered and created huge waves! China is gathering to create the last wave of
Can Taiwanese businessmen still stick to the strategy of winning by having scale?
In the past, China was a global manufacturing factory, produced in one place and shipped to the whole world. Now, the role of China's world factory fades, coupled with the policy push and pulling of various countries, will lead to more regional factories around the world, such as Indonesia in Southeast Asia, Mexico in close proximity to the United States, and even India. China is the last wave of the accumulation of large-scale manufacturing on Earth. After this phenomenon disappears, distributed manufacturing will rise.
By then, the iPhone we bought may be produced closer to us and may not be cheaper, because the supply chain is broken, and the efficiency and cost advantages generated by group aggregation in the past are no longer available, but there is an opportunity to be customized according to local needs.
This move will redefine the competitiveness of each country. But another shocking number is: Taiwan’s manufacturing industry ranking will regress from 7th to 9th. Is it because most people are unwilling to leave China? When asked why she didn't follow the Long March, a chairman of Apple's components supply chain told us: In comparison, the transportation cost of shipping by sea is a small matter. He also said that ODM (design OEM) is scattered, but the upstream parts of our components are still from China. How can the upstream be scattered? Upstream factories are like large chemical plants. The equipment investment is very large, the production line cannot be moved, the more concentrated production, the more efficient it is, and the lower the cost.
Taiwanese businessmen still believe that if they have a large scale in one place, they can continue to win, but in the era of broken chains when the supply chain is broken, is this assumption still valid? Opening the list of Apple's suppliers, there are 40 suppliers released by Apple in China and 47 suppliers in Taiwan. The trend is that China has been growing in recent years, but Taiwan is declining. Will this Long March allow inland enterprises to accelerate the replacement of Taiwanese businessmen?
Let us wait and see, look forward to the growth of Chinese companies, and even more, our brother companies in Taiwan Province will thrive together and work together to do a bigger business.
Two pieces of land, one heart. Welcome to leave a message to discuss...
