X-raying the globalization of an icon

You probably recall, maybe still use, the old Sonicare electric toothbrush. It fought plaque at 32 KHz, was used by most dentists, guaranteed your money back if improvements were not obvious after 30 days of use, was bulky and all American. Chances are that even your dental hygienist would praise your toothbrushing style. At that time, Optiva, the maker of Sonicare, had a workforce of just 600 and sales of $175 million, in an all-American affair.

Fast forward to now. Five years after Optiva was acquired by Philips, Elite, scion of the old Sonicare, is becoming a global status icon. Elite is just one of the oral-care products a team of 4,500 workers of two dozen nationalities, at 12 locations and in five time zones, manufactures - this is indeed a global team. From Der Spiegel, here's the first half of the global journey of the Elite toothbrush, from spare parts to the assembly line:
The toothbrush is essentially comprised of 38 components. The parts for the energy cell, a rechargeable nickel-cadmium battery, are supplied by Japan, France and China. The circuit board, its electronic heart, comes pre-etched from Zhuhai in the Pearl River delta of southeastern China. The copper coils originate from the Chinese industrial city of Shenzhen, not far from Zhuhai. They are wound by armies of women with bandaged fingers. Globalization is largely a female phenomenon.

The 49 components on the board - transistors and resistors the size of match heads - hail from Malaysia. They are soldered and tested in Manila. Then they are flown to Snoqualmie on the West Coast of the U.S., the site of the parent plant. Meanwhile, back in Europe, the more complicated plastic parts are trucked from Klagenfurt in Austria to Bremerhaven in Germany. Klagenfurt also supplies blades made of special steel produced in Sandviken, Sweden. A freighter from Bremerhaven takes the half-finished brushes across the Atlantic to Port Elizabeth, New Jersey. From there they cross the continental United States by train. And in Snoqualmie, a 40 minute drive from Seattle, the final product is assembled and packaged.

By this time the components have traveled a full 27,880 kilometers, two thirds of the Earth's circumference.
And here's one of the current driving forces:
A worker in the US assembly team earns between $9 and $14 an hour, depending upon her position on the assembly line. A Chinese worker brings home about 1,000 renminbi a month - i.e. $120, or roughly $0.75 an hour. Just over 5 percent.
  1. Such redistribution of labor could explain the low inflation in the US - by keeping wages in check;
  2. The US workforce will likely find more redress from education than from labor unions;
  3. And... Today's future is in transportation.

1 comment:

fCh said...

Some Assembly Needed: China as Asia Factory (Source: NYTimes)

SHENZHEN, China — Hundreds of workers at a sprawling Japanese-owned Hitachi factory here are fashioning plates of glass and aluminum into shiny computer disks, wrapping them in foil. The products are destined for the United States, where they will arrive like billions of other items, labeled "made in China."

But often these days, "made in China" is mostly made elsewhere — by multinational companies in Japan, South Korea, Taiwan and the United States that are using China as the final assembly station in their vast global production networks.

Analysts say this evolving global supply chain, which usually tags goods at their final assembly stop, is increasingly distorting global trade figures and has the effect of turning China into a bigger trade threat than it may actually be...

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