Apple shakes up supply chain to increase margins

By Freddie Pierce
Follow @joelalevywriter Appleis reportedly making changes to its supply chain, making its Taiwan-based manufacturing partners "purely" respon...

Apple is reportedly making changes to its supply chain, making its Taiwan-based manufacturing partners "purely" responsible for device production, instead of procurement as well as production.

Industry publication Digitimes said the changes would affect profitability of Taiwan manufacturers in the long term, as they generate some profit from procuring device components for Apple.

However by letting its OEM partners raise quotes to maintain their gross margins, Apple is expected to increase these partners’ profits in the short-term by between 3 and 5 percent, and as they will also be no longer be required to maintain standing component inventories, this should also reduce pressure.

Apple has historically required its manufacturing partners to maintain certain inventory levels of all manufacturing components.

The change should allow Apple to more effectively control cost and quality, eliminating unnecessary middle-men and thus increasing its profits.

Apple Chief Executive Tim Cook has adopted a strict approach to the company’s supply chain since inheriting the position, insisting on more frequent and in-depth inspections, thorough supplier evaluation and overall cost management.


Featured Articles

US friendshoring supply chain policy 'divisive' - experts

Whitehouse bid to cut China & Russia adrift by 'friendshoring' its supply chains will not bring resilience and risks being divisive, say top academics

Diageo CPO Orozco to lead procurement at Kraft-Heinz NA

Diageo CPO Janelle Orozco takes up Chief Procurement Officer role for Heinz-Kraft North America, as food giant drives customer-focused transformation

DHL Express in Heathrow gorilla logistics triumph

DHL Express specialist logistics staff help ship Kiburi the silverback gorilla to Heathrow as part of London Zoo endangered species breeding programme

Global customs staffing issues hitting supply chains - EY


Latest China Covid outbreak poses supply chain threat

Supply Chain Risk Management

Automotive suppliers ecosystem set for change - Accenture