iPhone’s

Supply Chain
Under
Threat
 Introduction
•COVID-19 pandemic created serious problems for Apple’s
supply chain
•Tom Cook, CEO, worked really hard to make the supply chain
leaner and more agile
•Ranked in Gartner’s Supply Chain Top 25 list
•Able to survive through natural disasters
•Challenge posed by COVID-19 was unforeseeable and
uncertain
•lockdown and social distancing boosted the demand for
electronic devices
 Quantitative Factors
•In 2020, second largest player; 25.15% Market Share •80% of iPhone 12 production under Foxconn- 500,000
•Apple used 100% recycled tin iPhones per day
•Zhengzhou and Shenzhen - 94 production lines with 400 •By 2018 it was able to reduce their inventory by
steps 18.52% and it was lowest in 2019
•Cook reduced the suppliers from 100 to 24.
•Net income rose by 14.3% from 2017 to 2019.
•98% supplies comes from top 200 suppliers
•first quarter of 2020 the market share for apple
•In 2019, SME provided 86 suppliers with capability building
declined from 14.4% to 7.6% 
plans
•Supplier Care provided more than 950 suppliers with digital
training material
 Qualitative Factors
Phone quickly rose to the top spot among its product lineup in terms of sales and profitability

Raw materials  Assembly  Sourcing

- Components were made from
some rare and conflict earth
minerals
- Some conflict minerals were
regulated 
- Components sourced from - Apple used more than one
manufacturers and then taken to supplier for the same part on the
factories for assembly  same model 

Warehousing  Return and Recycle 

- importance of a lean - consumer could return the
inventory management product to any apple facility to
system  be recycled
- Low inventory levels helped - reduced its reliance on raw
to upgrade products faster. materials
 
 Problems
•The Supply Chain issue
• Covid impacted raw material extraction, manufacturing and
assembly
• Apple did not know where covid would hit next and what the
local government would do
• Shortage of workers
• IC shortage
•Customer purchasing power decreased 
•US-China trade war
CORE PROBLEM
 Recommendations
I. Apple can adopt a resilient supply chain:
• Diversify suppliers and manufacturing
• Increase the number of suppliers
• Near shoring
• Inventory and capacity buffers
• Recorded lowest inventory in 2019
• Minimize the risk of stock outs
II. Hire people from same area as the assembly line
• Accessible labor at all times
III. User friendly website
• Trend for online shopping
• Easy to use