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Apple's Supply Chain Secret

businessweek.com

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Re: Apple's Supply Chain Secret

#81

Post by asmithmd1 »

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.

I would bet that 90 day payment was a one off. You notice NO ONE quoted in the article was willing to have their name used so it might have been a friend of a friend story. The suppliers who talked gave details about turning down a $1 Billion pre-payment!

Re: Apple's Supply Chain Secret

#82

Post by huxley »

MichaelApproved wrote: post #68
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).

"Each machine typically goes for about $250,000. Apple convinced the seller to sign an exclusivity agreement and has since bought hundreds of them[...]" That's ~$25 million for just 100 of those lasers. If they bought hundreds of them, that means they paid tens of millions or even over $100 million just for that light effect.

Apple sold 16.8 million Macs just this year, so at $100 million for 400 laser system, Apple could pay them all off entirely in 2011 by adding $5.95 to the cost per Mac.

Re: Apple's Supply Chain Secret

#83

Post by screwt »

tripzilch wrote: post #73
MichaelApproved wrote: post #67

Earlier quoted context omitted.

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".

It's not paying 90 days 'late'. It's completely standard in manufacturing for payments to be agreed as due 30, 60 or 90 days after delivery. 90 days fairly long, but not particularly unusual.

It's also not unusual for companies to pay later than the agreed dates, but no-one has said Apple's doing that.

Re: Apple's Supply Chain Secret

#84

Post by gbog »

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).

Frankly, this little magic trick is worth the high price paid?

Re: Apple's Supply Chain Secret

#85

Post by sp332 »

idspispopd wrote: post #63
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).

The first time I saw it I pulled out a triplet magnifier to see what was going on. I've got a few great shots of the laser pattern if anyone is interested.

Yes please!

Re: Apple's Supply Chain Secret

#86

Post by akeck »

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?

As is stated above, they harmonize their supply chain so that no part of it needs much inventory. For good discussions of this technique, read "Chasing the Rabbit" by Steven Spear and "Toyota Production System: Beyond Large-Scale Production" by Taiichi Ohno

Re: Apple's Supply Chain Secret

#87

Post by Tangurena »

hswolff wrote: post #3
endlessvoid94 wrote: post #2

Interesting parallel to walmart.

What's Walmart's supply chain like?

Walmart pays faster, but they are just as aggressive at having their hooks into your financials as Apple and pressuring your margins down.

If you update or replace your ERP system, your contracts with Walmart require you to integrate the new system with Walmart's. If you weren't paying attention upfront, the required changes can quickly make your ERP implementation explode over-budget.

Re: Apple's Supply Chain Secret

#88

Post by ceejayoz »

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. “…

I'm pretty sure Foxconn paid their workers the whole time Apple has been involved with them.

Re: Apple's Supply Chain Secret

#89

Post by jmelloy »

AlexMuir wrote: post #79
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 t…

This is also one of the tricks Amazon uses to keep pricing low.

Re: Apple's Supply Chain Secret

#90

Post by Tloewald »

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…

It's priced into everyone's models. I worked in the ad industry fo a while where our clients (ad agencies) paid 50% up front and then the rest up to six months later. Meanwhile the artists lived hand to mouth and waned to be paid weekly in checks made out to cash. Meanwhile our hardware was all leased on multi- year terms despite becoming obsolete within 18 months.
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