Supply chains can be a tricky business if not planned and executed correctly. Whether it’s the occurrence of a natural disaster, a failed delivery or a supplier failing to meet its production quota, these elements can play havoc with the success of a product getting to the customer on time. So are there limits to the success of any supply chain?
The latest item to feel the strain of supply chain pressures is the new iWatch, or known by its official title, ‘Apple Watch’. This is Apple’s first wearable gadget that sends messages, Facebook updates and simplified apps to our wrist, eliminating the need to ever fiddle around in your pocket for your phone.
It wasn’t long after pre-orders for Apple’s much anticipated watch that trouble began. Within hours of the item going on sale on the 10th April reports came in that the waiting time had jumped by not just a few days but weeks and then months. Some models were eventually listed as ‘simply unavailable’.
As it turns out, the issue was the ‘Taptic Engine’, a key component designed by Apple that reproduces the sensation of being tapped on the wrist which was defective in models produced by AAC Technologies in China.
Later it was reported that a shortage of wristbands also contributed to delays, but the reason Apple was able to launch its product on time (albeit slower than expected) was that it didn’t rely solely on one supplier for all of its components. Nidec Corp of Japan was also supplying the key part without problems.
For the time being Apple is now relying on the majority of the Taptic Engine production being done in Japan, but it will take some time for the factory to increase production. With a single supplier, quantities of the Taptic Engine for use in Apple Watch devices will likely remain sluggish.
Consequently, the importance and benefit of having several suppliers for the same component is invaluable. Unsurprisingly, it is one of the strategies that the most successful companies will adopt in order to mitigate the risk of disruptions on the supply chain.
In summary, short of a natural disaster occurring which can significantly disrupt supply chains across an entire industry and a wider geographical area , there are no limits to Apple’s supply chain structure or in fact the Apple brand. Apple has shown that companies who invest in flexible and resilient supply chains can weather the storm and recover from supply chain disruptions more quickly than their competitors.
Whilst nothing is ever bulletproof, adopting a strategy similar to Apple can help protect a business from having to deal with the sort of outcomes faced by businesses which put all their eggs in to one basket.