Before the pandemic, Apple sent hundreds of engineers to China every month to oversee contract manufacturers. In recent years, the possibility of such scrutiny has been significantly reduced due to the COVID-19 pandemic, but Apple is gradually shifting to a new practice — it’s starting to rely more on local staff and using video conferencing and augmented reality systems at one organize a more efficient workflow.
In general, although the release of new iPhone models in 2020 was delayed, in the future the company coped with the problems of meeting the usual deadlines thanks to the effective localization of production – when previous Chinese employees were only the “eyes and ears”. Tens of millions of dollars were spent annually on flights to the country by American specialists, now Chinese employees are increasingly trusted to make their own decisions. In addition, representatives of the brand regularly use cameras to monitor what is happening in the factories on the other side of the ocean.
According to The Wall Street Journal, in recent years Apple has raised generations of local workers whose skills are constantly improving. Most products are manufactured in factories scattered across China by manufacturers such as Foxconn Technology Group and Pegatron Corp. produced. However, important decisions and product design are still made in the USA.
Notably, many of Apple’s suppliers are based in Shanghai, which is hardest hit by the COVID-19 outbreak today. Last month, Apple warned that the outbreak could cut sales by $8 billion in the current quarter. While China continues to restrict visas for foreigners, additional visitors are being quarantined for weeks. For this reason, many companies largely refrain from sending employees to China.
Localization is an important step for Apple, which has traditionally relied on corporate “power verticals” and is not typically inclined to delegate authority to local entities. It is known that other manufacturers have followed or intend to follow the company’s example and involve many foreign workers in China.
In particular, an April survey of nearly 400 members of the European Chamber of Commerce in China found that 60% of middle management and 62% of senior management plan to “localize” talent in the coming year.
Many companies fear that technology could be stolen, but there is still hope for the effectiveness of electronic remote controls. In addition, there are equally important risks such as official requirements to pass on the content of data transmitted abroad to authorities.
As for Apple, Chinese employees of the company are increasingly not only sending information to Cupertino for final decisions, but also supplementing them with their analysis of the situation and suggestions for solving the problem.