Apple one of the leading brand - Supply Chain process of Apple

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Apple is famous for innovation and design. But few people know that the way Apple handles inventory is also a factor that led to success.


A comparison of how tech companies managed their inventory in 2011 shows Apple was performing much better than Dell, HP, Blackberry (RIM) and Motorola. Using the Inventory Turnover formula that shows how many times a company’s inventory can be sold and replaced over a specific time period (so the higher the number the better), in 2011 Apple performed 2 times better than Dell, 5 times better than HP, 4.5 times better than Blackberry, and 5.5 times better than Motorola.


How does Apple run its supply chain operations?


In a nutshell, Apple purchases components and materials from various suppliers, then get them shipped to the assembling plant in China. From there, products are shipped directly to consumers (via UPS/FedEx) who bought from Apple's Online Store.


For other distribution channels such as retail stores and other distributors, Apple keeps products at Elk Grove, California (where central warehouse and call center are located) and ships products from there. At the end of product's life, customer can send products back to nearest Apple Stores or dedicated recycling facilities.


How did Apple manage to have such a great inventory management?


When Cook initially took over Apple's supply chain, he cut down the number of component suppliers from 100 to 24


He also shut down 10 of the 19 Apple warehouses to limit overstocking, and by September of 1998 inventory [stock on hand] was down from a month to only six days.


If you are manufacturing or distributing electronics, you might have something to learn from the above.




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