Supply Chain shortages catching up to Apple

By Freddie Pierce
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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