The New Apple iPad: High Tech Supply Chain Transparency (Part 2)

In the first post in this series, I shared an article highlighting how quickly high-tech industry watchers were able to break down the supply chain for Apple's new iPad. This level of supply chain transparency, while somewhat unique to high-tech today, could become more common in other industries as well. Multiple factors could drive this type of visibility and transparency, including regulatory/government requirements, competitive product and market analysis as well as supply chain risk management. In high-tech, it is relatively easy to conduct such analysis for the majority of product components -- suppliers either actually label their parts/components or leave tell-tale markings (e.g., a unique design) that experts can quickly decipher. But in other industries -- especially process industries -- achieving such visibility and traceability can be that much more difficult.

Still, there are multiple reasons to pursue such a competency, and procurement and supplier management teams are often ideally situated to facilitate such analyses alongside product engineers and designers. From a competitive analysis perspective, these efforts can help provide insight into a competitor's margins, the quality of the parts and assemblies as well as the degree of customized versus standardized/stock SKUs that go into a finished good or bill of material. From a global sourcing perspective, and when mapped against customs and import information from sources such as Panjiva, it can also provide insight into which low-cost country suppliers a company is working with that an organization may then want to consider for its own products.

Building overall transparency into company and product supply chains -- either direct competitors or a broader set of industry suppliers -- can also help provide greater overall visibility into lower-tier supply chain CSR practices. For example, if an industry watch group, government body or competitor discovers that a company is working with a supplier that is known for loose adherence to accepted labor practices or to have product quality lapses, then they can take action accordingly (e.g., publicizing that "Company A" is working with a supplier that does not meet generally accepted practices). In many cases, companies and groups are choosing to not just examine traceability from a competitive or watchdog perspective, but are banding together in efforts like supplier auditing and other shared supplier development services.

If you're curious to see how this type of collaborative approach can work, I would encourage you to investigate the models of the RX 360 consortium in the pharmaceutical/biotech market as well as what Achilles is doing for a consortia of oil and gas providers.

Jason Busch

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