If Supply Chain Sneezes, The Company Has A Cold

The old saying goes: do something right, and no one remembers, but do something wrong, and no one forgets. Those involved with mobile device maker HTC's supply chain should be hoping for a change in that rule, after the company suffered its first quarterly loss in Q3 and is redjusting its strategy to eek out a gain in Q4.

The quarterly loss is being attributed primarily to supply chain mismanagement and ineffective marketing. Regarding its supply chain, there were rumors throughout the early part of the year that access to the parts needed to manufacture the company's flagship HTC One phone was not provided adequately, leading to long lead times and backorders of the then-buzzworthy device. This squelched demand and lowered sales, while rivals Samsung and Apple had no supply problems with their devices and were able to capitalize on the gap.

Presumably learning absolutely nothing from their experience with the One, HTC again experienced supply troubles with the launch of its smaller, cheaper HTC One Mini. This issue was attributed to manufacturing issues, as apparently there were problems in the production of the milled aluminum casing that makes up the majority of the phone's body.

Both instances are due to HTCs negligence in the management of its supply chain. The quantity issues that plagued the HTC One's delivery are evidence of failed relationships with suppliers, to the point that they were either given incorrect information or lower priority, and poor institutional planning in terms of guaranteeing quantity. The manufacturing issues that hindered the HTC One Mini was poor management down the line.

Whether this negligence was due to resource constraints or simple mismanagement is never going to be released to the public, but it's a valuable lesson. If supply chain is running under-resourced, it can damage the entire company. Helpful leverage to have when looking to hire or bring in third-party supply chain experts.