After reviewing the list, I concluded that Apple has at least three suppliers for every single part it needs to make its products.
@Bolaji, thanks for the post. I am really surprised that the Apple released its suppliers list. Any particular reason behind choosing three suppliers? Is Apple trying to geographically diversify its suppliers or they all belong to the same region ?
Apple released the supplier list to stay on the positive side of the news. The company has been hammered recently by negative news coming out of the facilities of some of its contractors (Foxconn) and suppliers. By releasing the list, Apple wanted to prove it is doing its best to be a responsible corporate entity and that its suppliers must also do the same.
The company didn't pick 3 suppliers for each part item. I concluded from reviewing the list that it probably has at least 3 for each component but this is not exact as Apple didn't say who supplied what. We know what these companies supply and can deduce from this what they sell to Apple. The selection of more than one supplier for components is a standard industry practice to avoid getting mired in problems if a supplier runs into problems. In addition, it gives a company the opportunity to shop around for better pricing.
Apple may need vendors to meet very high expectations. However, how is Apple's payment terms? How fast do they pay to vendors? Do they provide advace to some small vendors?
_hm, It's difficult determining the payment terms for any major OEMs without anecdotal evidence from the suppliers. This is a no-go area for Apple suppliers. The company doesn't and won't allow suppliers to comment on such issues. However, there are a few ways of getting general information about this.
I looked at Apple's quarterly account payable and it has stayed relatively flat at about $14 billion even as its sales continued to grow. In the last quarter, it actually went down more than $500 million (sales were down slightly too, sequentially.)This implies improving payment terms.
Industry analysts also track things like accounts payable turnover ratio, which is used to determine how quickly a business pays partners. I don't know the numbers they have for Apple.
Lastly, Apple has used its huge cash to secure supplies of critical components. The company has bought or paid ahead for flash components, for instance, and invested at one time $3 billion to guarantee future supply. It may and is probably doing the same for other components and with smaller companies. This kind of strategic information won't be disclosed in details.
Bolaji, I am surprised to see the name of "Samsung" is still in the list. Is Apple trying to find substitue to Samsung because we all know Apple already has file so many lawsuit against Samsung.
Anandvy, Samsung is a conglomerate and its electronics division is one of the biggest in the industry. The company competes with but also supplies products to Apple and I doubt this will change anytime soon. Sure, they are entangled in lawsuits but that's at the OEM level. They still have supplier relationship in the components business.
You are correct, though, that it is fair to assume Apple will try to find alternate suppliers to products it buys from Samsung. At the same time, Apple can't afford to cripple its operations by insisting on a no-Samsung deal when it needs the parts.
Despite Apple and Samsung aparent disdain for eachother, samsung is one of the companies that manufacture "brains" of tablets and smartphones for Apple.
This is really a breakthrough for Apple. Their supplier list is a lot more diverse than most people--including myself--thought. No doubt every name on this list earned its position.
I will point out that an in-depth article on Apple's supply chain strategy was recently published I think in BusinessWeek. It was a very in-depth piece and I remember this because on of the writers, Peter Burroughs, worked with me at EB too long ago to mention. It was an investigative piece that I believe Apple did not cooperate with. Maybe this was the nudge that lead to this report--either way, interesting stuff.
Now that Apples Suppliers are identified US company's can ask why they can't be a Apple supplier? Assembling Company, chip manufacturer, case manfaucturer, etc.
Garyk, There are many US companies on Apple's supplier list. Many of its biggest suppliers are in fact US companies, including Intel, Qualcomm, Broadcom, Molex, AMD and Jabil Circuit.
As you said, "This multisourcing approach is an old but very important strategy" and I believe it will help Apple, but still we don't know why Apple adapts this new strategy? Do we know the reason?
Nemos, I have been pondering this and I am uncertain why Apple finally chose the option of publishing a list of all its suppliers. This is a list the company had kept secret for very long. A friend suggested during a recent discussion Apple published the list because the secrecy had served its purpose and might now be hurting the company. I tend to agree.
I think Apple recent strategy of publishing its suppliers list is to let those suppliers know who is who, and to put them into serious competition to get the best out of them to its advantage of its stringent demand.
"After reviewing the list, I concluded that Apple has at least three suppliers for every single part it needs to make its products".
This is the reason why Apple place its suppliers on strict terms and demanding the highest quality of products because it has many of thess suppliers at hand. The company can easily dictate for them and be in control, while the suppliers too have to agree so as to stay in business.
Apple indeed is not putting its eggs in a single supplier's basket, I think for the fact that if one fails, one will pass. Seagate Technologies, Western Digital Corporation and Hitach-LG Data Storage are their data storage suppliers too.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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