The main reason for Apple announcing a lower gross margin outlook for Q3 was the uncertainty behind the raw material supply chain issues prevailing during the last few quarters due to the Japan tragedy.
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Many products also use petroleum-based raw material inputs somewhere in the suppl chain.
Anchor customers often are significant value chain participants, such as large material suppliers, or original equipment manufacturers with a major position in a particular market.
The combination reflects the increasingly unsettled state of the art market lately, as billionaire collectors chase after the world's priciest masterpieces while collectors further down the food chain sneer at second-tier material that suddenly looks overpriced.
As process manufacturers, chemicals companies are on the upstream side of the overall consumer value chain, with heavy exposure to raw material pricing and energy costs.
They are working with the Not For Sale Campaign to source from that region specifically to benefit the producers and communities, bringing the material to a Cambodian manufacturer also committed to a fully transparent supply chain.
The fundamental model we teach MBAs for thinking about manufacturing is the value chain, a simple model that describes the value adding steps that take a low value material like iron ore and turn it into a high value product like a Ferrari Testarossa.
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The third mistake was that, because the workers were allowed to bypass the time-consuming mixing process in the tower, with its automatic controls for preventing such things happening, they were free to dump their material into a vessel that was not designed to prevent the accumulation of a critical mass sufficient to support a chain reaction.
This is accounted for by increasing raw material costs, currency movements (particularly the pound's fall against the euro), bottlenecks in the supply chain and construction in progressively more challenging sites.
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