Supply Chain

Apple faces new healthcare, supply chain risks with its Apple Watch

In a recent Inside Counsel article, Ivalua’s Paul Noel discusses the supply chain challenges the Apple Watch will present and how Apple can overcome them.

Apple is, without a doubt, one of the most respected and successful companies in the world. When looking to expand, it makes sense that it would target a new industry like healthcare. With the Apple Watch, a tool to track sleep patterns and heart rate, Apple will do just that.

While this move brings new revenue streams and customers, it also brings a slew of new supply chain and third-party risk management challenges not limited to:

  • Despite Apple’s tech expertise, its iPhones and tablets still experience glitches from time to time. The occasional glitch won’t fly in the healthcare industry, though. Healthcare is a highly-regulated industry where consumers are very concerned with metric accuracy. In some cases, their health even depends on it. One technologic glitch in the Apple Watch could lose overall customer trust and loyalty.
  • Apple has a track record of supplier issues, with devices far simpler than a wearable health tool. From iffy labor practices to poor pace of development, there isn’t a roadblock that Foxconn (Apple’s main supplier) hasn’t encountered.

Without a doubt, the Apple Watch will be one to watch in 2015. But, if Apple has any hopes of minimizing its third-party risk and preventing another public embarrassment surrounding its supply chain similar to the one it experienced with its iPhone 6 release, Apple must raise its supplier standards and better manage the supplier vetting process.

To continue reading on Inside Counsel, please click here.

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