A clear example of the challenges Apple confronts in reducing its reliance on China is the 50% rejection rate for iPhone shells made by an Indian supplier. Chinese vendors are apparently very near to Apple’s aim of 0% for casings that do not pass quality check.
One former Apple engineer claimed that there is little sense of urgency in the company’s Indian supply chain, which is reported to contrast poorly with the can-do attitude of Chinese businesses. According to The Financial Times, Apple’s attempt to replicate its Chinese supply chain in India has been hampered by poor yields.
Approximately one out of every two components that leave the production line at an iPhone casings factory in Hosur run by Indian conglomerate Tata, one of Apple’s suppliers, are in good enough condition to eventually be sent to Foxconn, Apple’s assembly partner for building iPhones, according to a person familiar with the situation.
Its 50% “yield” performs poorly in comparison to Apple’s target of having no defects. According to two former employees of Apple’s offshore operations, the factory is working on a plan to increase proficiency, but there is still a long way to go.
Former Apple workers claimed that Chinese vendors had a completely different mentality and aimed to go above and above for the Cupertino corporation. They claimed that a Chinese provider would frequently be given a task that was anticipated to take many weeks and do it the very next day.
Although the process is anticipated to take some time, there is optimism that Indian businesses would adapt and learn the standards required from an Apple supplier.
“Provincial governments “are bending over backwards to bring industry in, and they will do what China has done”, he said. “But, these are baby steps. Apple is now getting its feet on the ground, learning what does and doesn’t work . .. Give it three years and you’ll see it scaling up.”
He suggested its engineers learn the art of jugaad — a way of “making do” or transcending obstacles. “Because everything in India is an obstacle,” he said.