Last week Ben Thompson published a piece called "Everything as a Service." In it, he describes how Apple struggles with providing good software services to support its hardware products - and describes what he calls "the manufacturing model:"
Apple has arguably perfected the manufacturing model: most of the company’s corporate employees are employed in California in the design and marketing of iconic devices that are created in Chinese factories built and run to Apple’s exacting standards (including a substantial number of employees on site), and then transported all over the world to consumers eager for best-in-class smartphones, tablets, computers, and smartwatches.
I'm a big fan of Thompson's thinking and writing, and this piece provides a few very interesting insights into Apple's organizational structure. In the context of developing and distributing hardware products, however, I think Thompson's choice of words - "the manufacturing model" - is counterproductive and misleading.
I started thinking about this question a few weeks ago when prepping for my design for manufacturing workshop. It's something that's broadly misunderstood [citation needed] by people who haven't made a lot of things themselves, and one that I recommend you, dear reader, consider carefully as you're developing and distributing (or consuming and evaluating) hardware products.
Manufacturing is a thing that happens; you can literally go places and watch it. It's more than just converting raw materials into finished products; that's craft, which existed before the industrial revolution and continues today. Manufacturing implies scale, and some degree of division of labor, and a degree of uniformity in the finished products. I think this can be summed up as:
Manufacturing is people, doing physical things, again and again, in a repeatable way.
Apple relies on manufacturing, but their business model is more accurately described as "selling hardware products at a profit." Some of those hardware products are made by job shops which have the same business model as Apple has (Apple specifies the hardware product they want to buy, and the supplier sells them those products at some per-unit price). I'd also guess that many of Apple's suppliers sell them manufacturing services instead - billing on a per hour basis or otherwise. Either way, just saying "this company makes money by transferring ownership of a piece of hardware" tells you little about their organizational structure - and even less about their business model.
If you want to get good at manufacturing, do the same thing over and over again and try to improve the repeatability and cost structure of what you're doing. But don't confuse that with developing a business model - it does both things a disservice to do so.