Procurement

156 Component Suppliers

Forecast 150 days in advance
Quarterly Reviewed Inventory levels & monitored cost
of components and updates were continually suppliers

Apple redesigned the iPhones screen at the last

minute, forcing an assembly line overhaul.
To meet sudden spike in demand Foxconn rose 8000
employees at midnight, within an hour started a 12 hour
shift and within 96 hours the plant was producing over
10000 iPhones a day.

The Speed & Flexibility is breathtaking, There is no

American Plant that can match that a former
executive
 Procurement Tactics
Purchase Suppliers Production
Capacity in advance in order to ensure
steady supply of key parts.

Investment in Capital
Equipment for Suppliers in
exchange for both supply assurance &
achieving cost targets.
 Closed Ecosystem
Enabled Apple to:
- negotiate large discounts on
components
- flexible manufacturing volume
- competitors had to wait for key
components
- sign exclusivity agreements
 Draw backs for suppliers:
- Apple expected detailed breakdowns of suppliers costs
for manufacturing labor, materials & projected profit.
- Suppliers expected to keep two weeks of parts inventory
in close proximity to assembly plants.
- Cost to carry parts was borne by suppliers as apple
stretched out its payables to as long as 90 days after parts
were used.

Apple made prepayment of $578 Million to GT Advanced

Technologies Inc.
Limited our ability to take additional business Thomas
Guitierrez (CEO)