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Apple's Supply Chain Secret

businessweek.com

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Re: Apple's Supply Chain Secret

#51

Post by irrationalfab »

This is a great proof of the strategic advantages of totally controlling your operations. In the start you are at disadvantage, but if you manage to gain steam you end up with a competitive advantage that is almost unfair.

In Apples case this strong position is not only visible in the supply chain management but it is clearly present in all their stack. Another example is their supremacy in software.

I think that this is one of the great lessons from Steve Jobs, takin your time to control and develop everything internally it is feasible competitive approach.

Re: Apple's Supply Chain Secret

#52

Post by swombat »

forgottenpaswrd wrote: post #48
nailer wrote: post #17

> Most of Apple’s customers have probably never given that green light a second thought Most, I'm sure. But personally the first time I saw light shining through my metal laptop, I was amazed, a little delighted, and slightly confused about how they were doing it (because, as the article mentions, the holes are too small to see).

"Most of Apple’s customers have probably never given that green light a second thought" I did. I used microscopic lens to see how they are made, you will see concentric holes that are microns wide. I was amazed too, I knew it only could be made by lasers but I was delighted how someone could have that original idea. It is brilliant, and so elegant.

You can see them with the naked eye, if you look from about 5-10cm away. (and, presumably, if you have excellent vision or are near-sighted)

Re: Apple's Supply Chain Secret

#53

Post by philwelch »

wisty wrote: post #43
bravura wrote: post #40

"This operational edge is what enables Apple to handle massive product launches without having to maintain large, profit-sapping inventories." Could someone explain what that means more specifically? That they don't have to have a large stock? Doesn't this controvert the earlier statement: "Because of its volume ... Apple gets big discounts on parts, manufacturing capacity, and air freight."

Nope. Apple agrees to buy 1 to 5 million ipod screens from a supplier, at a $10 per screen (totally made-up figure). They say they want boxes of 100,000 units, delivered within 1 week of whenever they feel like asking for them. So Apple doesn't need a warehouse, they get their supplier to pay for that. They also have an identical deal with another supplier, so they can play them off against each other if they need to…

The other thing is just how many units Apple ships. They have to go with multiple suppliers at times just to have enough parts in the first place. You're talking about a company that buys a significant proportion of the world's NAND flash production a year ahead of time.

Re: Apple's Supply Chain Secret

#54

Post by swombat »

johncoltrane wrote: post #46
dotBen wrote: post #23

Earlier quoted context omitted.

Same here. Once I figured it out, I wondered why they don't ever use the same technique to expose the Apple logo on the lid of the laptop - so that the lid is perfectly flush/clean when the screen is closed but the Apple logo is shown during use. ...now I know the answer: the lasers are so expensive and in such short supply it would presumably create a bottleneck in the production - esp given the surface area of the…

Those micro-holes are covering a very small surface roughly the size of a LED. The small area is a large reason for their invisibility. Using them on a much larger area would make them a lot more visible as a whole, even without light. The result would probably look like a vaguely apple-looking smudge. Somehow I don't think it would pass.

Not only that, but it would probably weaken the strength of the lid considerably. Imagine holding your macbook air in a certain way and, when you put it down, finding you've made a thumb-print dent in the lid...

Re: Apple's Supply Chain Secret

#55

Post by ippisl »

kylewpppd wrote: post #9
hswolff wrote: post #3

Earlier quoted context omitted.

What's Walmart's supply chain like?

This is anecdotal evidence from them coming to speak at my college, but... Walmart controls almost all of it's logistics. Whereas its competitors use other shipping companies, and have inventory sit in 3rd party warehouses, Walmart builds huge distribution centers that service multiple Walmart stores. The distribution centers mean they can purchase huge levels of inventory at discounted terms. Running their own logis…

Also , by doing logistics for manufacturers and not the other way around, they make logistics for other retailers cost more(because of less scale), which increase the price of the competition.

Re: Apple's Supply Chain Secret

#56

Post by look_lookatme »

antoinehersen wrote: post #21
notatoad wrote: post #8

Earlier quoted context omitted.

ruthless. they handle so much more volume than any other retailer that suppliers are willing to sign anything just to be a part of it. all losses are passed back to the suppliers, which enables wal-mart to take huge risks. the sibling comment to mine references a huge volume of pop-tarts being shipped to florida in preparation for a hurricane. if during mid-shipment the weather changed, wal-mart would call up the sup…

If they make more money this way why are they getting screwed?

I'm not a Walmart hater, but as I understand, the company requires their suppliers to open their books for the inventory they sell to Walmart. If the company "makes more money", Walmart will squeeze them to lower their wholesale cost, but that won't necessarily be passed to the consumer.

Essentially, if you get in bed with Walmart, you will make the money you want in the short term, but eventually, if you want to keep that money coming in, you will lose control of your pricing.

This doesn't even get into exclusivity requirements for products, etc.

See Snapper lawn mowers, for some insight to this process.

Make a deal with the devil... and you'll end up at the behest of the devil.

Re: Apple's Supply Chain Secret

#57

Post by brc »

NegativeK wrote: post #20
kylewpppd wrote: post #9

Earlier quoted context omitted.

This is anecdotal evidence from them coming to speak at my college, but... Walmart controls almost all of it's logistics. Whereas its competitors use other shipping companies, and have inventory sit in 3rd party warehouses, Walmart builds huge distribution centers that service multiple Walmart stores. The distribution centers mean they can purchase huge levels of inventory at discounted terms. Running their own logis…

To toss some info on the cost-cutting logistics pile, a friend of my dad was a buyer for Wal-Mart for a while. According to him, Wal-Mart's corporate relocation assistance consists of a Wal-Mart truck and some random employees from a local store packing and stuffing your possessions in a semi.

Brilliant - I love it. If you're going to compete with a lowest-cost strategy, that's just how far you can take it.

Re: Apple's Supply Chain Secret

#58

Post by ippisl »

irrationalfab wrote: post #51

This is a great proof of the strategic advantages of totally controlling your operations. In the start you are at disadvantage, but if you manage to gain steam you end up with a competitive advantage that is almost unfair. In Apples case this strong position is not only visible in the supply chain management but it is clearly present in all their stack. Another example is their supremacy in software. I think that thi…

Apple do a nice combination of controlling operation, with open(relatively) ecosystem.

They use the rapid response of a huge open ecosystem of software developers, while still having a lot of control.They do it this way because in software , time to market is very important.

For the hardware part, which normally changes less often(slower phone buying cycle,phones are integrated and not modular like PC's, relatively long time before new electronic components become mass market) and time to market is less important(relative to software) , they use a closed ecosystem, in order to extract most of the profit.

Re: Apple's Supply Chain Secret

#59

Post by danssig »

look_lookatme wrote: post #56
antoinehersen wrote: post #21

Earlier quoted context omitted.

If they make more money this way why are they getting screwed?

I'm not a Walmart hater, but as I understand, the company requires their suppliers to open their books for the inventory they sell to Walmart. If the company "makes more money", Walmart will squeeze them to lower their wholesale cost, but that won't necessarily be passed to the consumer. Essentially, if you get in bed with Walmart, you will make the money you want in the short term, but eventually, if you want to kee…

>the company requires their suppliers to open their books for the inventory they sell to Walmart.

They do. And they'll start making demands about how you run your business (e.g. "stop buying this local, you need to buy it from China and here are a list of companies we recommend you use"). You will have lots of sales through Walmart but you have to be careful that they don't destroy your business on a whim. See Dill Pickle Co for an example.

Re: Apple's Supply Chain Secret

#60

Post by danssig »

ars wrote: post #27
notatoad wrote: post #8

Earlier quoted context omitted.

ruthless. they handle so much more volume than any other retailer that suppliers are willing to sign anything just to be a part of it. all losses are passed back to the suppliers, which enables wal-mart to take huge risks. the sibling comment to mine references a huge volume of pop-tarts being shipped to florida in preparation for a hurricane. if during mid-shipment the weather changed, wal-mart would call up the sup…

Your comment is fiction. Suppliers love walmart because walmart doesn't play those games with them, and walmart pays immediately, not after 90 or more days. Do a little research next time. The only people who really hate walmart are unions. Both consumers and suppliers love them. Small businesses have mixed feeling - yes walmart eats some of their business, but having a store near a walmart is great for them.

You make a post this ignorant and then tell others to do research? Amazing. I worked at Walmart head office for years and I can tell you that vendors deal with Walmart because they have no choice. Walmart is a horrible place to do business with and various vendors quit them because of their behavior (e.g. Snapper).

And it's Walmart who hates unions. Their profit depends on exploiting human labor as much as possible, so they don't like anything that gives workers a fairer shake.

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