But anyway going back to manufacturing, we started looking at the factory as a software problem. And the first people we hired in the factory were some software engineers. We convinced them to move from R&D into software, which was not easy. We had to give them bonuses. We had to cajole them. We had to promise them they could come back if they hated it. And they went over there. And we said, this is really just a software problem with interesting I/O devices called robots. That’s all it is.
And so we started building the software first. And our first robots that we got, we specced them out. And we bought them completely turnkey, with the robot arms on them, and all the electronics, and the software to control them. And we specced it out, but we didn’t write it. And they didn’t — they worked OK. Some of them are still in use, but they weren’t great.
And being software folks, we weren’t real happy. They weren’t elegant. We couldn’t do what we wanted with the robots. We couldn’t tie-in a quality information system to them, and all this other stuff we wanted.
So the second generation, we specced out the hardware, and had somebody build the hardware for us, but we wrote all the software on our own computers. We’re object-oriented, so we started writing robot objects, quality objects, you know, all sorts of objects to control this factory. And we found in our computer was great for it. And so our whole factory now runs on this object-oriented factory and quality system.
The last generation of — our latest generation of robots, which we’ve deployed this year, we actually built the hardware. I’ve been to Japan maybe — oh, a lot of times — maybe 30, 40 times. And I love to have factories over there. They always amaze me, because they built everything themselves. They weren’t afraid of anything. They needed a robot. They tried to buy one. But if they couldn’t, they’d actually engineer it and build it. And you’d think this was really expensive, but we found out it’s pretty cheap.
It’s actually cheaper than buying them. And so we’ve actually now designed our — and specced out our own robots. We don’t mill the metal or anything. We get that all made. We put them all together. And we do the software top-to-bottom. And we have now some extraordinarily advanced robots in the factory. And our computers are built, start to finish, on the key components, completely untouched by human hands.
So we’re pretty convinced we’re the low-cost producer. We do it in Fremont, California, right under our nose. And we export them to Japan, and all sorts of other places. And Canon is our partner in Japan. And they do very, very thorough quality audits. And we’re now at the point where we’re directly shipped to stock with them. And they say we’re a very high-quality supplier.
AUDIENCE: How do your lines tie in with your research — your development team? Because I had heard that they could actually change the line from their own computers –
STEVE JOBS: Yeah, they can. Well, we don’t give everybody permission to do that, but — yes, they can.
Here’s how it works. One of the things we do is we actually — when we want to build an engineering prototype — see what happens in most — one of the key things that manufacturing can contribute to competitive advantage is time to market. Why is that? Because the way most things work is you design your product here. And after you’re done, you throw it over the wall. And you design your manufacturing process here, sorting out a bunch of things that maybe weren’t done right here, fixing them, changing them, and then completing the process design.
What you want to do is do this, and ship it right here while your competitors are still here. And that’s what we’ve been able to do in many cases. What we do is, we suck data out of our CAD systems in engineering. We zing them around over the local networks over a T1 to Fremont, the factory is about 15 minutes away.
And in our own computers, we compute all of the robot placement programs’ fully-optimized path. We compute all the vision system programs. We check it against the bill of materials in the IS system. And we download it to the robots. And we’re ready to build a board, lot size of one, in-between two production CPU boards on the line, full surface mount with all of our automation technology.
Now, the key is that manufacturing did that so well for engineering, that we haven’t built a prototype in engineering for two years. We haven’t built a wire wrap, or any other kind of prototype in engineering for two years. Everything has been built in the factory.
Now, what does that mean? What that means is, manufacturing gets involved from day one. Because — the engineering guys call up manufacturing go, hey, we want to build a prototype. We’re going to need these special parts in that thing. Take a look at this. Tell us what you think. We’d like to do it tomorrow. Let us know if that’s OK, blah, blah, blah. They get involved from day one. And what it also means is — so we get this parallelism.