iPod battery supply constrained by a polymer producer

A Wall Street Journal article (March 29, 2011) traces supply worries for the lithium ion batteries used in the iPod to a polymer manufacturer, Kureha. The company produces PVDF – polyvinylidene flouride, a polymer that is flexible and thus ideal for lithium ion batteries. Kureha’s plant in Iwaki City was not significantly affected, but the port of Onahama is damaged and suppliers of raw material such as vinyl chloride and salt are not easily available to the plant. Kureha reports plants in the US, China and Vietnam but intellectual property (IP) considerations have caused them to keep the key technology in their Japanese plant. This story provides yet another example of third or fourth tier suppliers with significant global market share who expose the global supply chain to vulnerabilities.¬† Is Kureha right to be so worried about IP that production should be centralized in one location ? Should Apple and other OEMs offer to fly in product, albeit at higher cost, to keep the supply chain operational ? Should OEMs like Apple switch lithium ion batteries in the short run so keep their product supply flowing ?

About aviyer2010

This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , . Bookmark the permalink.

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