“An Apple a Day, Keeps Supply Chain Robust Another Day!”
In their article, “Apples Supply-Chain Secret? Hoard Lasers,” Adam Satariano and Peter Burrows introduce us to several key attainments that Apple has been able to incorporate into their structure. Along with design and “buy or make” scenarios, Apple’s innovative and successful Supply Chain Management and Operational Divisions have leapt well above those of other companies. Satariano and Burrows also share with their audience the “front-runner” position that Apple took 4 years ago in Supply Chain Management. Coupled with partnering for innovation and the virtually unlimited capital that Apple has at their fingertips, gaining supplier ...view middle of the document...
Supply Chain Managers for Apple exercised the notion of an integral link with this supplier and formed a relationship that granted them the exclusivity agreement discussed by Satariano and Burrows. With suppliers being an expert on their own product, this incorporated and proved to be a valuable information source as they “geared up” for production. The alliance being formed, Apple advanced into the procurement of hundreds of these lasers at a cost of $250,000.00 per laser. Apple remained hopeful and confident as they literally “re-invented the wheel.”
Apple has been a dominant company when looking at virtual principal control over the supply chain. This integration of a strategic supply partner into the supply chain manager’s “front pocket” generated a dynamic and powerful “upper-hand” by Apple’s infrastructure. Discounts on manufacturing capacity, parts, and air freight are a direct result of the massive volume and capital expenditures they are able to finance. According to what the authors reveal, Apple would not be able to handle these gigantic manufactured goods launches without this advantage. I don’t believe there is any doubt when an organization of Apple’s magnitude still maintains a 25% margin on these products.
Satariano and Burrows do an excellent job of relating to its readers the confidence and expertise levels that Apple sustains in their operational management arena. They also incorporate into their article the importance that this design issue brings a greater competitive advantage alongside of its “design to retail” implementation. As consumer demand increasingly calls for upgraded innovation, Apple answers the call with this simple indicator light on their various models of MacBooks and Trackpads. Consumers evaluate and consider many features when choosing and purchasing a “high-dollar” item such as these. Some will chose on functionality, with others looking at the aesthetics or the ease of use. How this calculates into the supply chain portion of the product innovation is simple; with the event of increasing almost double its capital expenditures within the supply chain group, this allows for them to make very robust prepayments to their suppliers, in turn, making the availability of the newly designed product much more expedient.
Apple has proven over time that by being a large and conglomerated corporation, it really is much easier to manage and nurture supplier relationships compared to that of a mid-sized corporation. Proof of this is how, with their power and massive ordering components, they in essence, “lockout” competitors wanting similar delivery deadlines as Apple. A great example of this was brought out in the article as to how their suppliers were so busy filling orders for Apple that other “bottom feeders” had to wait for a particular high-end drill. Up to as much as six weeks to six months.It is important to remember though, not all suppliers will succumb to this type of approach.
Keeping in touch...