Apple is one of the world’s leading tech giant companies. The company has a network of 400 production and manufacturing units in 30 countries and 180 regions across the world. The tech brand has established an in-depth supply chain network to satisfy consumer and market demands. However, the SC and logistical issues are bound to happen from various internal and external sources. Today, we’ll discuss top Apple supply chain issues.
Top Apple Supply Chain Issues
Some of the top Apple supply chain issues are as follows;
Many businesses and companies are still experiencing the post-impact 2020 crisis. Sourcing the production and distribution of tech spare parts is one of the key problems out of many. The report from 3rd party repair program showed that it is a serious problem for Apple; the tech giant company has limited access to parts with high prices. The report also mentioned the unspoken matter of Apple’s operations and its competition with other independents.
Manufacturing SC Partners
Apple has established partnerships with various manufacturers and producers across the world. It is difficult and challenging for the company to amplify the quantity and volume of recycled components and parts in the SC network. However, many top and high-profile partners of Apple are changing their partnership agreements. The top partner Foxconn said that it won’t take the responsibility and obligation of Apple’s high-end phones.
The repairing of Apple devices and the required components have to come from somewhere. It is useful to suggest that the repair shops send the Apple devices to the company for the original components; neither the company has time for it.
Over Dependence on China
According to an estimate, the production and manufacturing of approximately 95% of Apple products and devices are from China. They’re like iPods, Macs, Airpods, iPhones, and many others. As mentioned earlier, Foxconn is the top manufacturing partner of Apple and its factory has employed more than 500,000 employees and workers.
Chinese manufacturer offers cheap and specialized labor for the production of their devices that Apple couldn’t find anywhere else. In fact, Apple’s manufacturing facilities are so wide and scale that they would have the capacity to fill the American tools and diemakers. Such type of over-reliance on one manufacturer could be highly risky to the company. The company experienced supply chain and distribution issues in the 2020 crisis.
Apple’s CEO “Tim Cook” acknowledged the shortage of chips and considered it a top-priority supply chain issue. The shortage of chips disrupted the production and manufacturing of Apple’s products like the Mac, iPad, and iPhone. In order to deal with the shortage, Apple started to reach out to other companies in the tech industry to fill the gap.
However, the demand for Apple’s devices is increasing and it puts more pressure on the company. If the company doesn’t deliver it on time, then it would negatively impact the customer experience and customer satisfaction level.
Apple faces the severe challenge of going green and making its entire supply chain network environmentally friendly and sustainable. The company’s SC network is operating its business in those countries that have high carbon emission rates.
Fuel Based Suppliers
The suppliers of Apple are from those countries that have the highest carbon emission rates. It requires the company to move its production and SC operation into those countries and regions that have a lower carbon emission rate. However, the cost of developing production facilities is very high. It is significant to keep in mind Australia and the EU are building climate-based trade barriers to implement their climate-based policy across the world.
Distribution & Flood Risk
Its production and manufacturing facilities of Apple face a high risk of floods and power shortages and cut down. It happens often in the summer when the weather becomes hot; then it negatively impacts the production and yield. However, it is difficult to predict a combination of factors right that would cause problems for the company. Apple faces the serious challenge of going green and achieving zero-carbon emissions by 2030. The company is reliant on for production of its devices; they have the highest consumption rate of fossil fuels and greenhouse gasses.
Production Footprint & Hot Weather
Apple has established its production and manufacturing facilities in those Asian countries where the temperature is very high. Many research studies have proven the fact that warmer climate and hot weather has a great impact on the economic growth and productivity of the company. If we look at Apple’s suppliers and partners, then they are all from the warmer regions and parts of the world like the following;
Conclusion: Apple Supply Chain Issues
After an in-depth study of Apple supply chain issues; we have realized that Apple is the world’s leading tech giant company with an efficient SC network and processes. If you are learning about the supply chain challenges of Apple; then you should keep in mind the abovementioned challenges and problems.
Ahsan is an accomplished researcher and has a deep insight in worldly life affairs. He goes Live 3 days a week on various social media platforms. Other than research writing, he’s a very interesting person.