Renewed concerns for Apple's supply chain management surface

Shortly after its co-founder and longtime CEO Steve Jobs resigned last month, Apple worked diligently to reassure business partners and customers alike that little around the company would change once Tim Cook took over. But recent revelations have caused some experts to reiterate their concerns over Apple's supply chain management practices.

Issues resurfaced when a financial analyst for JPMorgan Chase revealed that sources had confirmed Apple plans to cut back orders for parts built by members of its supply chain in Asia. 

That bit of news, according to a report from the Wall Street Journal, caused brief turmoil on the stock market and raised questions about the sudden move from Apple.


For one, it had many thinking that demand for Apple's iPad 2 had suddenly plummeted. That's surprising given the continued strength of the tablet among consumers.

"Overall, the data points suggest some slack iPad supply, at both the production and component level. While the food chain data points would appear to suggest a potential deterioration in end demand, we believe this is a premature and likely incorrect conclusion," Goldman Sachs stated in response to the news, according to the Wall Street Journal.

A slashing of parts orders could also be the result of a supply chain management issue. It could very well be that Apple recognized that it had previously ordered too many of a specific part or that a warehouse management solution had identified that the company has many of the devices in its inventory waiting to be shipped.

Analyst Shaw Wu of Sterne Agee agreed that not much should be made of the cuts.

"We checked in with our supply chain sources and believe there is some merit to these cuts," Wu wrote to investors, according to the Journal. "However, we do not believe this puts risk to either ours or consensus iPad estimates as these build plans are still well above expectations."

After Jobs stepped down in August, technology news provider CNET reported that Apple's supply chain appeared to be intact and safe for years to come. The Focus Taiwan News Channel also reported that Apple plans to continue to work with manufacturers of the island nation under the new CEO Cook.