May 17, 2020

Supply Chain shortages catching up to Apple

Apple
Apple shortages
iPad 2 delays
iPad 2
Freddie Pierce
2 min
China-based Foxconn’s labor and part shortages could affect Apple’s iPad and iPhone production
Apple has displayed remarkable supply chain agility in the wake of the 9.0 earthquake that rattled Japan, as the companys supply chain suffered no ill...

Apple has displayed remarkable supply chain agility in the wake of the 9.0 earthquake that rattled Japan, as the company’s supply chain suffered no ill effects from the disaster.

Now, it looks like another Far East supplier will give Apple some problems.

According to multiple reports, iPad and iPhone parts could be limited thanks for labor and part shortages at Foxconn, a key manufacturer in China.

Apple had tried to remain on course with its supply chain by paying premium prices for parts to ensure a steady flow product.

All the money in the world may not be enough to source parts, however, simply because there might not be parts to be had.

Apple had planned to supply 10-10.5 million iPad 2 units in the second quarter, but with Foxconn’s struggles, Apple may struggle to reach that mark. The company is hoping to reach a shipment goal of 35-40 million units for 2011, and that goal has also been put in jeopardy thanks to supply chain struggles.

Apple COO Tim Cook said his company is facing “the mother of all backlogs” with the iPad 2.

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With all that being said, Apple is still in a pretty envious position. Most tablet competitors have flopped recently, most notably the Motorola Xoom and RIM Playbook.

Too much demand is always a good thing to have, but you have to wonder if customers will be turned off by Apple if iPad 2 shipments are delayed any further.

Some supply chain innovation may be in order, and if there is a solution to this problem, you’d have to bet the minds at Apple will find it.

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Jun 16, 2021

EU and US agree end to Airbus-Boeing supply chain tariffs

supplychain
Boeing
Airbus
tariffs
3 min
Supply chains embroiled in Airbus-Boeing dispute will no longer be impacted by $11.5bn tariffs imposed on food and beverage, aircraft and tobacco

The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic. 

Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years. 

It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC. 

The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn. 

In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products. 

Boeing-Airbus dispute by the numbers  

  • The dispute began in 2004
  • Tariffs suspended for 5 years 
  • $11.5bn worth of goods affected by tariffs
  • $3.3bn in duties paid by businesses to date 
  • 15% levy on aircraft and 25% on non-aircraft goods suspended

Both sides welcome end to tariffs 

European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.

“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.

Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”. 

The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."

This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.

Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”

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