As you know by now, the Apple Inc. (NASDAQ:AAPL) always seems to be going through some sort of change. We talked about this here, earlier in the week, and now we have more news that is sure to alter the future direction of the company.
According to a recent report by Digitimes, Apple is looking into the benefits of splitting orders to new suppliers. In other words, Cupertino is not going to put all its eggs in one basket. This is a smart move on a number of levels.
Here is what the article had to say:
“Apple is planning to split its upstream orders among 2-3 makers instead of relying on only 1-2 major makers, in an effort to avoid the risk of placing all its eggs in one basket. Electronics manufacturing service (EMS) providers will be the first to be impacted by the new strategy, according to sources from the upstream supply chain.”
By taking this step, Apple is able to avoid a lot of the risk associated with relying on only one or two suppliers. Imagine if something would go sour with one of these relationships. Cupertino would be faced with a giant problem.
With both Wistron and Compal Communication expected to join forces with Apple Inc. (NASDAQ:AAPL) sooner rather than later, the company is changing its supply chain approach. Whether or not this has any positive impact upfront is yet to be seen, but it will definitely allow Cupertino to mitigate some of its risk.
This is not something that is going to take place right away, however. The article goes on to add the following:
“However, even if Apple decides to add new partners, these suppliers are unlikely to start delivering orders until 2014 or 2015 since Apple’s partners are all required to establish independent product lines specifically for the company, the sources said.”
As you can see, Apple is making changes to its supply chain but things take time to get up and running. It is going to be at least another year until these companies are able to jump into the action and take some of the burden off of Apple Inc. (NASDAQ:AAPL)’s other suppliers.
The article goes on to add that this strategy could help Apple start an operating model that leads to greater flexibility as well as increased profits. Two things Apple Inc. (NASDAQ:AAPL) would greatly enjoy.