read this article and consider what went wrong and what could Apple have done differently"

This was an important and emerging new technology, one that would produce manufactured sapphire to cover the face of all of Apple$$s new iphone products. According to the WSJ$,$GT made furnaces for producing sapphire.... GT told Apple in March of last year that it was developing a furnace that could produce a sapphire cylinder, known as a boule, weighing $578$ pounds, more than twice as large as what were then the biggest boules. The larger boule would yield more screens, reducing costs....Apple offered to lend GT $$578$ million toward building $2,036$ furnaces and operating a factory in Mesa, Ariz. Apple would buy and retrofit the factory for an additional $$500$ million and lease it to GT for $$100$ a year.$$

This type of purchase, nearly half a billion dollars, and for a supplier that is unique with an emerging new technology, puts this category of sapphire squarely in the middle of the $$strategic category$$ for the traditional $$Kraljic$$ category portfolio matrix. Based on traditional supply management pedagogy, strategic categories require a great deal of attention, information sharing, and joint collaboration to ensure that the right mutually beneficial outcomes occur.

The second part of this challenge is understanding what type of supplier Apple was dealing with. According to the WSJ$,$GT was intrigued, because the agreement would provide more consistent revenue than equipment orders. Moreover, GT$$s business making equipment for solar cells had fallen on hard times. GT$$s $2013$ revenue was down $66\%$ from two years earlier.$$ In other words, GT was also a $$high risk$$ supplier, in that they had indicators of having had previous financial problems and had made bad technology investments in the past....read on$...$

Mapped to a $$supplier preference$$ matrix, this would indicate that GT was definitely viewing Apple as a preferred customer, and would fall into the $$Develop$$ category, or a supplier that is not doing a lot of business with Apple, but has the customer as a strong developmental prospect. But because they were high risk, a prudent supply manager would want to watch them closely.

In terms of a procurement strategy, everything looked copacetic and had fallen into place. GT$$s stock price took off when Apple and GT signed an agreement to seal the deal. Apple would lend GT $$578$ million toward building $2,036$ furnaces and operating a factory in Mesa, Ariz. Apple would buy and retrofit the factory for an additional $$500$ million and lease it to GT for $$100$ a year.

Shortly after, in fact a few days later, the first sapphire boule came out of the furnaces, and it was badly cracked, and deemed unusable. Soon, it became clear that the manufacturing problems were more than a single batch, and that there were major problems with the process itself.

At this stage, there should have been daily onsite meetings, so that Apple and the supplier could work on the technical issues together, and identify the source of the problems. Instead, GT continued to flounder, hiring over $700$ people for jobs that didn$$t exist, as capacity was not up and running yet. They struggled with quality, production planning, and failed to meet deadlines. Rather than have regular communications, Apple failed to conduct due diligence and project planning. GT$,$ fearing that Apple would leave them stranded, continued to try to work through the problems on their own, and continued to experience difficulty.

This is a textbook case, in that it demonstrates the importance of managing strategic relationships through careful performance measurement, human interaction, joint problem solving, and project management. It also demonstrates the critical nature of joint technology development. Apple was essentially funding the project, but not providing the human capital and knowledge required to make the technology viable. GT was afraid to ask for help, and preferred to clam up and continue to work on their own. In the end, both parties failed to do what was needed to manage the relationship. In the end, both parties failed to do what was needed to manage the relationship.

This doesn$$t appear to be a one$-$time event either. Another blog on the WSJ website interviewed Apple suppliers, and two key lessons came out of it:

$$To long$-$time suppliers, GT is a reminder of two lessons they learned long ago: Don$$t rely too heavily on Apple and don$$t make promises you can$$t keep. Follow these, they say, and you probably won$$t end up like GT$.$

$$Apple always asks the suppliers to expand their manufacturing facility to meet the rush demand for its new product, but we have to make our own judgment as the big orders only last for a few months,$$ said a manager at an Apple supplier. $$For example, Apple might want us to increase $100$ production lines, but we would