Date: 18/03/2011

Smartphones and tablets' supply chain to go jittery caused by the Japan quake

A typical portable electronic device such as smartphone will have 100s components supplied by different vendors all around world. The business success of a mass consuming electronic device depends more on the efficient management of supply chain rather than the design itself. Apple iPad or any latest smartphone is no exception to this. With Japan having approximately 20% of different suppliers of electronics components mainly semiconductor chip, LCD and Battery suppliers, the recent quake and tsunami has disturbed the supply chain of components severely causing multiple spikes in prices of chips and various other electronic component prices.

The various other factors adding to the supply chain disruption include:

1. The shortage of power delaying fixing of Japanese factories
2. Lean inventory trend followed by vendors to save money
3. Redesign with alternate part is costlier and time consuming
4. The ripple effect in supply chain from material to finished product

Amid all this, Japan factories are only halted with no major damage (overall with few exceptions) and in most of the cases will get back to production in weeks to get the supply chain back to normal.