Supply chains are susceptible to a number of problems or glitches that can occur throughout production and delivery of items. Companies can find themselves in financial trouble when changes and disruptions in operations lead to expensive oversights or miscommunications.
Phone delivery glitches
One of Apple's key iPhone suppliers recently announced it was shipping significantly fewer shipments of the new iPhones than the company originally requested. The supplier Hon Hai Precision Industry Co. said several quality standards were not met during production, preventing the company from deploying many units of the iPhones to customers worldwide. The issues with quality are rooted in design-related production glitches, which could have been mitigated or alleviated with adequate supply chain management solutions in place.
Because supply chains are complex entities made up of several independent units, tools that unite and integrate operations of each branch are key to success. Supply chain management solutions work to prevent common problems from manifesting, and ensure the problems are addressed promptly to reduce losses and mitigate risks. These solutions use integration technology to connect managers throughout the chain, allowing for clear communication and access to information from any location or branch in the business.
"Market demand is very strong, but we just can't really fulfill Apple's requests," said Terry Gou, chairman of Hon Hai Precision Industry Co.
Gou did not detail which features of the iPhones design were cause problems in production, or how long it would take the supplier to fix the issues before more shipments could be sent out.
Ever since the iPhone 5 launched in September, Apple has experienced a number of supply chain problems that delayed delivery of the product to eager consumers worldwide. As a result, the highly anticipated product was scarce in most retail outlets, having a noticeable impact on Apple's share price and consumer sentiment. Apple investors grew wary of the company's ability to meet consumer demands effectively in the future, which in the ever-competitive smartphone market could drastically affect sales in the future.
In addition to delivery issues with the iPhone 5, Hon Hai Precision Industry Co. is also facing pressure from labor rights groups worldwide. The stricter quality controls placed on the iPhone 5 production may be putting increased pressure on production-line workers in China. In light of accusations of employee mistreatment, Gou promises workers are supported and working under favorable conditions. Supply chain management solutions help companies keep track of all operations to ensure optimal performance and limited liabilities.
Unforseen growth is good, disruptions are not. Is your company prepared?: