Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Apple's Supply Chain Secret

businessweek.com

Post reply on HN
Print view View original

71–80 of 153 posts

Re: Apple's Supply Chain Secret

#71

Post by tripzilch »

Interesting article, but this quote is absolutely sickening:

> Because of its volume—and its occasional ruthlessness—Apple gets big discounts on parts, manufacturing capacity, and air freight. “Operations expertise is as big an asset for Apple as product innovation or marketing,” says Mike Fawkes, the former supply-chain chief at Hewlett-Packard (HPQ) and now a venture capitalist with VantagePoint Capital Partners. “They’ve taken operational excellence to a level never seen before.”

Crediting a company that until very recently employed slave labour with "occasional ruthlessness" and "taking operational excellence to a new level" is just disgusting.

There is still no excuse for that. They should be grovelling on the ground begging for forgiveness, not being commended for it!!

At least thanks to this article we know how that situation came to being... Just a little harmless "occasional ruthlessness".

Re: Apple's Supply Chain Secret

#72

Post by Game_Ender »

cousin_it wrote: post #61
forgottenpaswrd wrote: post #47

Earlier quoted context omitted.

Just in time: http://en.wikipedia.org/wiki/Just_in_time_%28business%29 Inventories are buffers, in an idealistic scenario(perfectly efficient) we don't need them. I order something, they make it and they give me instantly, no need to store it). In reality we need them, but Apple have very efficient logistics that make them minimal, compared with other companies, that can't control as much as the supply chain as Apple…

So to simplify even more, Apple doesn't have to maintain "large, profit-sapping inventories" because they can just force their suppliers to do that instead?

No, you just have to work with your suppliers so they can produce at rates that match your anticipated demands. Toyota was one of the first companies to start this process decades ago: http://en.wikipedia.org/wiki/Toyota_Production_System

Re: Apple's Supply Chain Secret

#73

Post by tripzilch »

MichaelApproved wrote: post #67
binarray2000 wrote: post #65

OK...I cheer to so many things Apple does regarding operations. But when I read Apple [..] sometimes doesn't pay until as long as 90 days after it uses a part [...] I think only "lame". With $80B and 40% margin, company with that reputation... Manufacturing is hard. And very expensive. Organize processes, buy machines and raw materials, pay the labor. And then comes Apple and gives itself a loan (basically, it's a lo…

Weigh that with times that they pay in advance. It's a case by case bases and I'm sure they're not late with payments. If they wait as long as 90 days, I bet it's because that was part of the business agreement they made with the manufacturer.

Um, no that's not how it goes.

Paying late in manufacturing is all over the place, 30 days is considered acceptable, 60 the absolute limit, but paying 90 days late is just something Apple can get away with because of it's size and "occasional ruthlessness".

Re: Apple's Supply Chain Secret

#74

Post by Synaesthesia »

tripzilch wrote: post #71

Interesting article, but this quote is absolutely sickening: > Because of its volume—and its occasional ruthlessness—Apple gets big discounts on parts, manufacturing capacity, and air freight. “Operations expertise is as big an asset for Apple as product innovation or marketing,” says Mike Fawkes, the former supply-chain chief at Hewlett-Packard (HPQ) and now a venture capitalist with VantagePoint Capital Partners. “…

Slave labour? Really? Since Apple products are made my Foxconn, which also make products for a number of other manufacturers, aren't they then complicit too? How about Foxconn?

Re: Apple's Supply Chain Secret

#75

Post by lemma »

binarray2000 wrote: post #65

OK...I cheer to so many things Apple does regarding operations. But when I read Apple [..] sometimes doesn't pay until as long as 90 days after it uses a part [...] I think only "lame". With $80B and 40% margin, company with that reputation... Manufacturing is hard. And very expensive. Organize processes, buy machines and raw materials, pay the labor. And then comes Apple and gives itself a loan (basically, it's a lo…

Without knowing anything else, 90 days sounds like the amount of time sellers extend credit to Apple (30 and 60 days are also common). Usually such terms come with slight discount for early payment. Good cash management practice requires that they pay on the last day they get a discount or wait until the last day to pay.

Re: Apple's Supply Chain Secret

#76

Post by smackfu »

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?

Generally what happens is that the company wants the volume from Walmart, and thinks it will lead to lots of profit, but Walmart ends up making most of the profit, and the company spends a lot of money and then is overextended and can't even stop selling to Walmart without taking a big loss, since there is no replacement volume out there.

But any company making a deal with Walmart should know this by now, so who is really to blame?

Re: Apple's Supply Chain Secret

#77

Post by tptacek »

binarray2000 wrote: post #65

OK...I cheer to so many things Apple does regarding operations. But when I read Apple [..] sometimes doesn't pay until as long as 90 days after it uses a part [...] I think only "lame". With $80B and 40% margin, company with that reputation... Manufacturing is hard. And very expensive. Organize processes, buy machines and raw materials, pay the labor. And then comes Apple and gives itself a loan (basically, it's a lo…

Welcome to business in the real world. Try consulting for any Fortune 500 company sometime, and see how long they take to pay you after you invoice them. If 90+ days is the norm for paying small consultancies, it's hard for me to feel too sorry for multi-billion-dollar electronics suppliers.

Re: Apple's Supply Chain Secret

#78

Post by spleeyah »

wallflower wrote: post #15

> When the iPad 2 debuted, the finished devices were packed in plain boxes and Apple employees monitored every handoff point—loading dock, airport, truck depot, and distribution center —to make sure each unit was accounted for. When I went to WWDC10, I was struck by the small detail of the conference security wearing black polos with the Apple logo and "Security" under the logo. At most conferences, the security is w…

They do have a full time security department: https://ssl.apple.com/support/security/

And believe me, they take every aspect of security into account.

Re: Apple's Supply Chain Secret

#79

Post by AlexMuir »

binarray2000 wrote: post #65

OK...I cheer to so many things Apple does regarding operations. But when I read Apple [..] sometimes doesn't pay until as long as 90 days after it uses a part [...] I think only "lame". With $80B and 40% margin, company with that reputation... Manufacturing is hard. And very expensive. Organize processes, buy machines and raw materials, pay the labor. And then comes Apple and gives itself a loan (basically, it's a lo…

At this size, I don't really feel like it's an issue. Manufacturers for Apple will all employ financial analysts whose job is to price the 90-day payment terms into their prices. If you're going to pay me tomorrow, I'll quote you $1 a widget. If you're paying in 90-days it's $1.04 a widget.

Incidentally, I know a wholesaler [1] in London which sells at almost cost price. It makes most of its profits from sitting on the cash it takes for 60 days, before paying it to suppliers.

[1] http://www.dhamecha.com/

Re: Apple's Supply Chain Secret

#80

Post by tptacek »

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.

That's neat, if true. The long-haul truck drive is by far the most expensive part of a cross-country move; movers themselves are very cheap.
Post reply on HN