This has enabled Apple to be able to have return customers in great numbers. From the business perspective, it is a bit costly to be able to attract new customers than it is to keep the existing ones.
Apple seems to be having supplier problems. Last week Wintek, one of Apple's suppliers, was reported to have been using a chemical, n-hexane, which had poisoned 49 workers.
This week there is an issue with suppliers who use child labor to make Apple products. Either of these problems could affect any company that uses suppliers in areas with lax regulation, doing potential substantial damage to that company's brand and products.
Child labor is particularly problematic because the fix is to fire the underage employees, who may be the only wage earners in their families.
The whole problem may be artificial. This doesn't help our own Don Tennant, who was already regretting buying an iPhone and getting lots of feedback.
Steve Jobs has argued this isn't Apple's problem, but a world problem with regard to priorities and a general lack of enforcement by local agencies. I agree that this has resulted from policies that seem to focus more on appearance than reality. Apple, in effect, got nailed for trying to police the problem itself.
However, while his statements are accurate, they don't absolve Apple or any other company focused tightly on costs for being part of the problem.
The Problem of 'Don't Ask, Don't Tell' Companies are under heavy pressure to find the lowest-cost providers and typically are free to look globally to find them. While they often have guidelines for things such as green practices, bribery and child labor, there tend to be few in regard to enforcement.
Companies tend to know who violates these guidelines, but often adopt a "don't ask, don't tell" stance with these suppliers to optimize margins and assure profits. The problem isn't that these practices go on, but that their existence and the related risks aren't properly assessed against the savings that these low cost suppliers provide.
In short, while the benefits, largely financial, of working with these suppliers are well understood, the risks aren't -- and this leads to lopsided decisions that don't take these risks into account.
This week it happened to Apple, a company known for being incredibly controlling, but it could happen to any firm using outside suppliers. So what should be done? Risk Assessment The first step would be to determine the risk, but the "don't ask, don't tell" practices make this difficult.
Risk assessment should begin in a virtual sense.
What I mean is that if components are being built in areas such as China where unacceptable practices like this are common, then simply assume they will at some point be discovered and assess the cost of this discovery.
This should give you a baseline risk that is reasonably accurate. Risk Mitigation This then would suggest some mitigating practices such as packaging PR responses designed to deal with the problem both retroactively and proactively.
These might include philanthropic efforts focused on green activities or protecting children in the affected areas. However, if the problem is extreme -- involving physical abuse, death or suicide -- it is doubtful any mitigation will be adequate.
In addition, if one of the mitigating acts actually makes the problem worse -- as might be the case if children were fired and then starved along with their families -- your company might go from being indirectly to directly responsible for the unfortunate and image-damaging acts.Sep 24, · How soon will Apple fix iOS and will the company ever address the issues with bent iPhone 6 and iPhone 6 Plus units?
I think there needs to be some discussion here. Oct 23, · Previous supply-chain snags have hit less-important Apple products, like its Watch, which is a small sliver of the company's revenue, Bloomberg reporter Alex Webb notes in an interview with.
One of my coworkers is using the last year’s inch 4K iMac model for graphics design.
The other day, he told me that the iMac doesn’t shut. Apple—A Supply Chain Model of Excellence executives at suppliers and management experts familiar with the company’s operations, Apple has built a closed ecosystem where it exerts control over nearly every piece of the supply chain, from design to retail store [According to Mike Fawkes, the former supply chain chief at Hewlett-Packard.
Supplier Responsibility Apple A supply chain that empowers people and protects the planet. We hold ourselves and our suppliers to the highest standard when it comes to human rights, environmental protections, and responsible business practices in our supply chain.
including the services of leading experts in sustainable waste management. Apple's culture, approach to strategic human resource management, and innovative capacity are explored, including Apple's approach of 'deep collaboration'.
A key strategic issue noted in the case is Apple's strategy of maintaining a proprietary, integrated system of hardware and software which is in contrast with the approach of most other.