A recent explosion at one of China's two factories responsible for manufacturing Apple's new iPad 2 underlines the substantial risks of supply chain disruptions with production of materials occurring in only a select few locations.According to The Associated Press, Taiwanese company Foxconn Technology Group, which manufactures the iPads, said production had been suspended as a result of the explosion but would not detail potential consequences to the supply of the tablets.
The explosion is just the latest incident to demonstrate supply chain risks, after the earthquake and subsequent tsunami in Japan derailed the manufacturing of a number of products.
"If you are trying to do as much as you can in one place to reduce the risks of an overextended supply chain, then you are very dependent upon the safety of those one or two factories," David Dayton, owner of Silk Road International Inc., told the news source.
According to Reuters, three workers were killed and another 15 were injured in the blast.
The focus is now shifting away from the unfortunate human loss of life and onto the effect the incident could have on the production of Apple’s iPad 2 which just a month back was said to be facing the “mother of all backlogs”. Analysts will begin weighing in today with many expected to predict that this tragedy will only worsen Apple’s supply issues.
ReplyDelete