During the Covid disaster, Apple discovered that placing the vast majority of its manufacturing in a single nation weakened its provide chain. Since then, it has been working to repair that downside by encouraging companions to open up in new nations.That’s a wise response to supply-chain weak spot, and whereas the Apple in India story is now well-known, the corporate can be placing sources into Vietnam, constructing out its iPad and Mac manufacturing strains within the nation.Apple isn’t alone. Local reviews inform us Nvidia CEO Jensen Huang additionally intends to open for enterprise in Vietnam. And the presence of each Apple and Nvidia in Vietnam will seemingly encourage different shopper electronics corporations to get extra concerned.Apple’s enterprise responds to shocksWhile reporting on Apple suppliers virtually at all times focuses on China, the corporate has companions worldwide, supplying parts for last meeting. Traditionally, Apple’s provide chain has concerned a mix of in-house R&D with manufacturing outsourced to trusted companions.The prime 200 firms on Apple’s revealed Supplier List collectively account for round 98% of its procurement. Apple is tough to work for, demanding, and drives tight offers, however has the mass manufacturing scale to take the time worthwhile.Over the years I’ve discovered that relationships between the corporate and its key suppliers are typically large on collaboration and make intensive use of Apple-developed manufacturing processes, with restricted stock and extremely optimized ordering and manufacturing. Apple’s provide chain globalized early — within the 2000s underneath then-COO Tim Cook. Today, because the manufacturing setting has turn into extra complicated, it’s of no shock that Apple is creating a brand new strategy.This might maybe be seen as a extra federated, extra complicated, but nonetheless firmly internationalized mannequin by which all of the shifting elements are orchestrated to stop stock build-up. (Cook at one level mentioned, “Inventory is fundamentally evil,” including, “You want to manage it like you’re in the dairy business.”) Working towards enterprise resilienceIn Vietnam, Apple is working with a well-recognized Chinese companion, BYD. That relationship isn’t new, however what’s new is that Apple isn’t simply placing manufacturing in Vietnam, but in addition basing vital elements of its iPad design and improvement sources within the nation. It means Apple and BYD will work on new merchandise and new manufacturing processes to make these merchandise.In different phrases, Vietnam received’t simply be making iPads, it’ll even be designing the manufacturing course of used to make them, simply as Apple has moved some iPhone manufacturing design to India.While Apple watchers could also be desirous about all these trivia, what issues most is that they show Apple’s altering strategy to enterprise resilience. The firm’s operations groups don’t wish to be caught out by any future catastrophe, and the transfer to make a extra resilient chain is a hedge towards any type of that.Putting eggs in lots of basketsIt’s vital to understand that regardless of political pressure between the US and China, China stays an enormous marketplace for Apple. A current Morgan Stanley shopper observe tells us that 74% of Chinese iPhone house owners could buy a Vision Pro mixed-reality headset inside 12 months of its introduction, and 90% will purchase one if the worth falls. In the US, simply 33% of iPhone customers will purchase one. However, constructing redundancy into manufacturing is pricey and leaves firms uncovered to further prices.That’s why Apple appears targeted on placing manufacturing on a per-product foundation into a number of nations. So, iPad and Mac manufacturing will transfer to Vietnam, iPhone to India, and so forth. These new factories don’t utterly exchange the corporate’s current Chinese provide strains, however they do complement them, giving the corporate much more resilience towards future shock. Unleashing the chance in changeApple is utilizing these vital modifications to unlock recent alternative.The firm is driving onerous towards reaching carbon-neutral standing throughout its provide chain. Reaching this objective would require large investments in renewable power, in addition to in extremely environment friendly manufacturing processes and industrial tools. Setting up a extra resilient provide chain additionally means the corporate and its companions should spend money on next-generation equipment as new services come on-line. And increasing into new markets as Apple’s conventional territories turn into saturated or decelerate additionally requires engagement in new nations.So Apple is fixing a number of challenges directly. It should spend money on manufacturing outdoors China to assist defend towards future shock. It needs to spend money on extra climate-friendly manufacturing processes, and it must generate new enterprise in new territories.By increasing its manufacturing areas, the corporate is reaching all these items — moving into new markets, turning into extra resilient, and utilizing the chance to spend money on new manufacturing processes.After all, even with out the supply-chain classes of Covid-19, many producers must spend money on new manufacturing services, so why not flip this funding want into a brand new alternative to construct enterprise match for an unsure future?That maybe is crucial takeaway for any enterprise looking for to make its personal provide chain extra resilient to deal with future shock. Not solely does doing so offer you an opportunity to take inventory of operations in the present day, however you additionally get to make use of the investments you should make anyway to assist construct what you are promoting in new markets whereas modernizing your strategy to manufacturing to satisfy the wants of local weather regulation.Up subsequentThis, in precept, is what Apple seems to be doing. That’s going to profit the corporate’s enterprise in new manufacturing host nations and hints that its much-criticized however nonetheless courageous carbon-neutral branding goes to begin showing on many extra merchandise from the corporate within the subsequent 5 years.The lesson for any enterprise is similar because it ever was: When it’s essential to make large modifications, why not search the chance inside them? Just like Apple, you might find yourself with one thing higher than earlier than. 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