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50% Rejection Rate For iPhone Casings Produced In India Show Scale of Apple's Challenge (9to5mac.com) 123

Posted by BeauHD from the quality-control-issues dept.
A 50% rejection rate for iPhone casings produced by an Indian company is a stark illustration of the difficulties Apple faces in reducing its dependence on China. 9to5Mac reports: Apple's target for casings that fail to pass quality control is 0%, with Chinese suppliers reportedly getting extremely close to this. The attitude of Indian suppliers is also said to compare poorly with the can-do approach of Chinese companies, with one former Apple engineer saying that there is no sense of urgency in its Indian supply chain...

The Financial Times reports that poor yields is a key challenge faced by Apple in attempting to replicate its Chinese supply chain in India: "At an iPhone casings factory in Hosur run by Indian conglomerate Tata, one of Apple's suppliers, just about one out of every two components coming off the production line is in good enough shape to eventually be sent to Foxconn, Apple's assembly partner for building iPhones, according to a person familiar with the matter. This 50 per cent 'yield' fares badly compared with Apple's goal for zero defects. Two people that have worked in Apple's offshore operations said the factory is on a plan towards improving proficiency but the road ahead is long."

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. [...] He also suggested that Apple, too, will need to adapt -- especially when it comes to dealing with the bureaucratic government: "He suggested its engineers learn the art of jugaad -- a way of 'making do' or transcending obstacles. 'Because everything in India is an obstacle,' he said."
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50% Rejection Rate For iPhone Casings Produced In India Show Scale of Apple's Challenge More

50% Rejection Rate For iPhone Casings Produced In India Show Scale of Apple's Challenge

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  • Part of it is just culture shift (Score:5, Interesting)

    by SuperKendall ( 25149 ) on Tuesday February 14, 2023 @06:24PM (#63293569)

    If you get enough people together that value quality then over time, that culture will take hold in new people working and in the end they can get much closer to the target they seek. It takes some time to change teh culture of workers in a company.

    It's a worthwhile effort and one that while they should have started a while ago, is at least underway now.

    • If you get enough people together that value quality then over time, that culture will take hold in new people working and in the end they can get much closer to the target they seek.

      That's adorable..

      Meanwhile:

      D E S I G N A T E D
      E
      S
      I
      G
      N
      A
      T
      E
      D

    • Yeah, people who have the skill to improve the skills of others are worth their weight in gold.

    • Seems China can do quality after all. (Score:1)

      by Anonymous Coward
      How do you explain the Chinese number being, and I quote, "extremely close to zero".
      Who has egg on their face now?
      Seems China can do quality after all.
      • China can do quality when you make them. That’s how it works for most organisations, but one thing that western companies as well as Chinese manufacturers had to learn the hard way, is that the tolerance for shoddy workmanship is much higher in China.

        • > China can do quality when you make them.

          Yup. See, for a shining then tarnished example, ThinkPads. Even when they were IBM branded, they were made in China by Lenovo. But with IBM's QC people riding herd on them, the quality was kept up to the point that they were pretty much the best PC laptop money could buy. And you'd have been a fool to buy anything else outside special cases like toughbooks ir of you just could not deal with that eraser thing instead of a trackpad. But when IBM sold the busine

      • Re:Seems China can do quality after all. (Score:4, Interesting)

        by ghoul ( 157158 ) on Wednesday February 15, 2023 @03:42AM (#63294545)
        Tata is doing QC and sending the ones which pass to Apple. So as far as Apple is concerned the error rate IS zero. Tata will get better with time. But noone has a zero error rate. Whoever is caliming a zero error rate is playing games like counting all the working ones against the Apple order and the defective ones against the Apple local copy order.

      • How do you explain the Chinese number being, and I quote, "extremely close to zero".

        You fucking maroons are a parody of yourselves. Are you that stupid? You don't understand that there's a difference between products made in China under contract and the bullshit they come up with on their own?

        My HP computer might be mostly made in China, but I can be fairly certain that HP has all sorts of QA checks on the shit that is being built since it's their reputation on the line.

        It's quite clear the Apple has QA checks as well. But 90% of the crap you find on AliExpress, or some such, is goin

    • If you get enough people together that value quality then over time

      That's the thing, in some country that's simply not possible (or at least very difficult, to the point it's not worth the hassle).

    • WTF almost all companies have specs and tolerances. Apples are tight. But an iPhone housing is not ultra nano tech level. The India mfg will need precision machine tools. These need to be setup calibrated very accurately. Then probably run with clean coolant etc. the tools wear and need to be replaced or serviced. QC needs a very accurate and efficient methods. Japan started with cheap lower quality than Demming . Now Japan a leader in Machine Tools and precision parts at a cost. China went thru similar lea

      • Re: (Score:2)

        by ghoul ( 157158 )
        Part of the issue is talented Indians leave for US. As more industry starts in India, talented folks may decide to stay at home. After all most of Apple's workforce in Silicon Valley is Indians. If they can do the job in US , their brethren can do it in India.

  • Free trade with a country five times bigger (Score:3)

    by RightwingNutjob ( 1302813 ) on Tuesday February 14, 2023 @06:28PM (#63293585)

    with a prevailing wage of zero is a form of national suicide.

    • Yeah but we're not all in this together, as Timmy & Co like to so amply demonstrate.

    • Re: (Score:1, Interesting)

      by ap7 ( 963070 )

      Oh, don't worry. No Indian wants 'free trade' with the US or any other country either. That kind of 'free trade' is what the East India Company did with India a few hundred years ago, leading to the theft of much of India's wealth that the UK built itself on.

  • What a "surprise".

  • Jugaad is really easy (Score:5, Insightful)

    by hdyoung ( 5182939 ) on Tuesday February 14, 2023 @06:34PM (#63293593)
    On this one. Apple pays a set price for each part that meets spec. As far as Apple is concerned, the rejects never existed. If a local company wants to shrug it’s shoulders and accept a 50% reject rate, they just jugaaded themselves into half-the-revenue-they-could-have-made.

    No harm no foul for anyone. Apple gets what it wants and locals get to maintain their way of life.

    I know this might sound harsh, sarcastic or even a little bit racist, but I dont meany it that way. If a culture wants to move at a slower pace, they should have the right to, and be respected for it.

    But Im under no obligation to follow the lead. If I’m writing the checks, a manufacturer that manufactures at half the rate will get half the revenue stream. That’s not disrespectful, that’s how a spreadsheet works.

    • Thank you for this new term I didn't know.
      Added to internal dictionary.

    • Most of this, but Apple doesn't want to be rejecting parts, they don't want to even receive them.

      • Most of this, but Apple doesn't want to be rejecting parts, they don't want to even receive them.

        Especially since they are pushing and getting evaluated on their environmental impacts.

    • While the contract could stipulate only parts meeting spec are accepted, a high failure rate will impact volume. Not receiving enough parts is an indirect cost to Apple.

    • In other industries (e.g. the film industry) if you come up with an ugly solution to a problem, it's called a 'shitty rig'.

    • If a local company wants to shrug it’s shoulders and accept a 50% reject rate, they just jugaaded themselves into half-the-revenue-they-could-have-made.

      That really depends doesn't it. If it costs 25% of the cost to have 100%, to have a 50% success rate then you are making more money. So true they are making half the revenue but twice the profit.

      • Good point. If they can make more profit with a 50% reject rate, at half the total revenue stream, more power to them. I suspect Apple would be fine with this as long as the manufacturer isn’t trying to pass off out-of-spec parts.
      • In many cases, doing a good job and doing a bad job costs exactly the same amount of money. If not then you figure out ways to do a good job without paying too much more.

        And after all, they manage to produce 50% that meet specs, so that wouldn't happen if they built anything for a quarter of the cost. Getting the success rate from 90% to 99% might cost money, getting it from 50% to 90% doesn't.

        • Re:Jugaad is really easy (Score:5, Interesting)

          by IDemand2HaveSumBooze ( 9493913 ) on Wednesday February 15, 2023 @05:26AM (#63294689)

          I'm not sure if that's true. There can be many causes for such a high failure rate. It may be that the company is cutting corners and using substandard defective machinery - getting better equipment costs money. It may be that the workers are making mistakes because of inadequate training and supevision - again, fixing that costs money. It may be that the workers have a "they pretend to pay us and we pretend to work" attitude - again only fixed with better pay and working conditions which again requires money. In software industry the impression I get is that Indian subcontractors main selling point is often speed of delivery and low cost rather than quality, if that's also the case in manufacturing, then such a high reject rate is not very surprising.

          • Re: (Score:2)

            by butlerm ( 3112 )

            Speed of delivery and low cost are legitimate selling points but in the long run software quality is worth paying for and the local contracting industry will sell out their future if they do not do everything practical to improve it where it is lacking. That goes for software developers in all other countries as well.

    • Aside from the risk of capacity surprises if a given part proves easier or harder than expected to produce to spec; I suspect that Apple really doesn't want to deal with the policing and potential perverse incentives that arise from that volume of subpar but approximately compatible material that (in all but the more seriously defective cases) is probably more profitable to sell out the back door than it is to grind up.

      Regardless of whether you read this behavior as a ruthless attempt to control the seco

      • I doubt itâ(TM)s about the repair market. If 50% of the output is reject and these arenâ(TM)t destroyed, then where are they going? Apple doesnâ(TM)t want their brand damaged by a marketplace flooded with poor imitations. It could be a very serious problem for them in many regards at that scale.

    • Apple pays a set price for each part that meets spec. As far as Apple is concerned, the rejects never existed.

      I think Apple is starting to actually care a bit about its reputation as an environmental disaster. If I'm correct, then the last thing they'd want to be associated with - even at one step removed - is a 50% scrap rate.

      Also, with that high a defect rate, they're probably considering how many hidden defects are waiting to bite them in the warranty. And yes, even things like casings can have hidden defects.

    • There is a non zero cost to quality control. If want to know if 99% of the items in a shipment of 10,000 widgets are good I could inspect 200 of them. If only two fail I accept the entire lot and worry about the 100 failures later. If there is a 50% failure rate I will end up inspecting 20,000 widgets to get my 10,000 good widgets. I'm doing 100 times more inspections. Depending on the cost of the inspections, time, cost of shipping twice as many units etc., this will reduce the value of an Indian made

    • Re: (Score:3)

      by AmiMoJo ( 196126 )

      Apple can't rely on the manufacturer to reject parts. They need to check them all themselves. They can rely on the Chinese manufacturers to self-test because they have a demonstrated commitment to quality and a proven track record of delivering it.

      If 50% are rejects then a large proportion of the 50% that were deemed acceptable will probably be borderline.

    • As far as Apple is concerned, the rejects never existed. If a local company wants to shrug it’s shoulders and accept a 50% reject rate, they just jugaaded themselves into half-the-revenue-they-could-have-made.

      No harm no foul for anyone. Apple gets what it wants.

      It's not quite like that, because Apple's own quality control is necessarily imperfect. Let's say that the India manufacturer constructs 2,000,000 cases, of which 1,000,000 pass internal QC and go on to Apple, and that the manufacturer's internal QC has a 5% miss rate. Then Apple got 50,000 bad cases. If Apple's own QC checks have a miss rate of 1%, then 500 bad phones go out to end users.

      In contrast, if the Chinese manufacturer constructs 10,000 bad cases and 990,000 good ones, sending them all to Apple

    • Too bad it's not really like that. If the rejection rate is 50% for the defects they found, the defect rate is also probably 50% for the defects they missed. So, probably they are accepting a large number of defective parts.

  • Cry me a river (Score:2, Interesting)

    by Virtucon ( 127420 )

    For a company that deliberately outsources thousands of jobs to subcontractors, this makes all the sense in the world. The profit margins on iPhones is crazy as is it for all cellphones and they want to all race to the bottom to get the cheapest labor possible on their terms. Here's an idea Apple, instead of making 90% on an iPhone make 87% and pay either your own workers or a better subcontractor to make them.

    Stop racing to the bottom.

    • Stop racing to the bottom.

      *checkout line at Walmart*

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Apple isn't racing to India because it's trying to race to the bottom. It's racing to India because US and China tensions are fucking up trade as we have known it for the last 2-3 decades.

      • Apple isn't racing to India because it's trying to race to the bottom. It's racing to India because US and China tensions are fucking up trade as we have known it for the last 2-3 decades.

        Exactly this. Add to this the recent impact on manufacturing due to China’s Zero Covid policy.

  • Then the code they pump out.

  • Quality ethos is not universal and may not matter (Score:5, Informative)

    by couchslug ( 175151 ) on Tuesday February 14, 2023 @07:08PM (#63293679)

    W. Edwards Deming was admired in Japan and ignored in his home country.

    Not all cultures have the same view of how to make things or the same goal in making them. Not all societies reward the same things. Consider Russian engineers who may want to produce quality work but whose options are socially (organized crime is the government and the anti-government) constrained. Not all societies have identical views of professionalism civilian or military. Humans are not of identical socio-political form-factors. That diversity facilitates adaptation and evolved to suit local conditions.

    Apple is only a toy maker and if it cannot get its desires from one source it can diversify. As a premium image brand it doesn't really have to race to the bottom, that's a choice.

    If suppliers make a lot of scrap that's their problem as Apple need only concern itself with what it needs. It may be just fine for a supplier who can afford a 50% reject rate to produce at that rate. They or Apple can scrap the unwanted parts and use those meeting spec.

    Every manufacturing process has a scrap or reject rate. Tolerable levels are just fine else they'd not be tolerated.

    • OIC, your argument is that it is likely cheaper for the newspaper to hire a team of monkeys for a couple of bananas to write articles, and they are therefore ecstatic that they turn out 50% usable articles. They save a ton of dough and are still able to churn out material, even though 50% of a paper is only half of what the public wants...

      Nice...

    • Apple is not a private company and its shareholders have continued to push the company to earn a greater margin. The term "race to the bottom" is wholly idiotic because no one has complained about the cheaper consumer goods, automobiles, food, luxuries, and everything else the competitive market has delivered because we all collectively voted that way with our wallets. But Apple only has so much leeway and will ultimately have to follow whatever path maximizes the value of the company to the millions of peo

  • Not automated? (Score:3)

    by tiananmen tank man ( 979067 ) on Tuesday February 14, 2023 @07:12PM (#63293689)

    So a human is making these cases?

  • Not about poverty (Score:3, Insightful)

    by julian67 ( 1022593 ) on Tuesday February 14, 2023 @07:23PM (#63293709)

    People in this thread are offering India's poverty as a reason for their very low quality manufacturing quality. But that isn't the reason. Other countries still emerging from colonialism and poverty don't have the awful quality problems of Indian industry. Just look at what South Korea achieved, or China, or how Vietnam is doing as manufacturer. Post colonial India sank into corruption and stagnation with the government wanting to be the Big Socialist Authoritarian State while barely being able to enforce its will and govern. It produced a fabulously corrupt economy where rules are for idiots and laws exists but nobody cares. Everyone knows they are on their own and that to rely on the state for justice or law is suicide. So there is no live and let live, little long term outlook, everything is about screwing others over and taking what you can. Now. Or, if you have a good education, getting the hell out. It will take more decades to undo the stagnation, moral as well as economic, of the socialist experiment, and also to get past the similarly corrupt idiocy of the current sectarian and reactionary establishment.

    • When was china colonized?

      • In the 19th and early 20th centuries China was colonised by several European powers, the most impactful being Great Britain. Google "Opium Wars" or "Boxer Rebellion" for example.

        • Re: (Score:1)

          by Anonymous Coward

          Genghis Khan also imposed himself, a little, for a while.

      • From within or outside?
        The answer to both is "many times". OK, not as a whole, but that's less relevant.

    • Re:Not about poverty (Score:4, Insightful)

      by sjames ( 1099 ) on Tuesday February 14, 2023 @08:44PM (#63293889) Homepage Journal

      The problem is corruption. If the problem was intrinsic to socialism, China would be doing even worse since they went full on revolutionary Communism.

      • And several decades ago they abandoned socialism (they aren't stupid) but retained the authoritarian one party state structure.

        • Re: (Score:2)

          by sjames ( 1099 )

          So did Russia, but they kept the corruption and it has done them in.

          OTOH, most of Europe is doing fairly well with their varying degrees of socialism.

          • You're confusing social democratic politics with socialism. No significant European state is socialist. For example, Germany, France, Italy, Spain, Belgium, Netherlands, Denmark, Sweden. Some are even constitutional monarchies. Sweden is the most left but even that is not socialist - it is a monarchy, a democracy and a home to some very significant global businesses.

            • Re: (Score:2)

              by sjames ( 1099 )

              Propose any of those countries policies on social safety or economy in the U.S. and watch the rabid conservatives scream THAT'S SOCIALISM!!!

              • Re: (Score:2)

                by flink ( 18449 )

                The US understating of socialism is totally tapped though. I agree with jullian67 - none of those countries are socialist. Social welfare != socialism: it's just putting a collar on the beast, not killing it.

      • The problem is also that in China you only need to find one corrupt party leader and by the virtue of dictatorship you will get your result, while in India you need to play around with multiple leaders in complex game of politics.

    • Sounds like a future America.

  • Like the old adage goes... (Score:5, Insightful)

    by njvack ( 646524 ) <njvack@freshforever.net> on Tuesday February 14, 2023 @07:45PM (#63293779)

    The best time to plant a tree is thirty years ago.

    The second best time is today.

  • Who knows, we might need to pay someone, or put a plant where we'd be responsible for the environment.

  • Just pay your workers more. If you pay dirt cheap wages, as it is most likely the case otherwise they would not have picked India, you get dirt cheap quality. There are 1.4 billion people there, I am sure there are plenty who are really competent, motivated and ready to work for you if you pay the price.

    • No, sorry, this is not true.
      Take someone with a corrupt mentality, taught from cradle to cut corners, pretend to work, stealthily pass his tasks to whoever he can, and double their pay. Hell, multiply their salary by 10 if you wish.
      They will continue with their ways, all while laughing inside at how stupid you are.

      I have been unfortunate enough to work with people like that, and still work with some of them. They make way more than I do (the advantage of living in a more developed country), and they are sti

  • Business with India sucks. (Score:5, Insightful)

    by Smonster ( 2884001 ) on Tuesday February 14, 2023 @09:17PM (#63293959)
    Their bureaucracy and tax structures are awful. As a small business you have to basically hire someone whose sole job is to wade through their muck. We basically gave up on the market because it was too much of a hassle. The only business we do in India now is with third parties who then do business there. There are soooo many hoops to jump through compared to Europe and the Americas, I mean people do it, but I have better things to do with my time and efforts. There are plenty of ready customers elsewhere and only so much time in the day.
  • Have to tone down the war drums until iPhone production can be moved.
  • Apple is going to get dirty.
  • Is getting close to 100% quality due to genuine manufacturing process improvement, or is it due to hiding defects? With such a disparity I have a feeling that while Indian processes no doubt need to improve, that Chinese reporting on percentage of manufacturing defects could be artificially high. Totally agree with another comment that suggested improving quality is less about cracking the whip and more about people management and having everyone feel directly responsible for quality as a desired outcome.

  • Why the heck are we still manufacturing things using human labor? That's dumb. Use a robot you nitwits.

  • The obviously need to send over Gavin Belson in person to insist that those lazy Indians increase productivity, enforce quality control, & get those children in the creche busy doing something productive rather than "playing" & "learning" stuff.

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