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Apple's Supply Chain Secret

businessweek.com

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Re: Apple's Supply Chain Secret

#101

Post by tlholaday »

binarray2000 wrote: post #96
tptacek wrote: post #77

Earlier quoted context omitted.

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.

Well, I AM talking about the real world (note my post scriptum). Also, when you talk about small consultancies and Fortune 500 companies: I have worked for a small consultancy and, later, as a freelancer for German top companies (Deutsche Telekom, Deutsche Post, Munich Re - to name a few) and they all have paid, both that consultancy and me, within a month of which the consultancy/I have sent the invoice. USA is, jud…

The shareholders are told exactly what is going on.

Accounting:

1) Buy parts for $1000

debit Parts Inventory $1000 credit Liabilities - Accounts Payable $1000

2) Pay vendor

debit Liabilities - Accounts Payable $1000 credit Cash $1000

Re: Apple's Supply Chain Secret

#102

Post by JonWood »

binarray2000 wrote: post #96
tptacek wrote: post #77

Earlier quoted context omitted.

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.

Well, I AM talking about the real world (note my post scriptum). Also, when you talk about small consultancies and Fortune 500 companies: I have worked for a small consultancy and, later, as a freelancer for German top companies (Deutsche Telekom, Deutsche Post, Munich Re - to name a few) and they all have paid, both that consultancy and me, within a month of which the consultancy/I have sent the invoice. USA is, jud…

Having worked as a solo freelancer in the UK my experience was that prompt payment is inversely proportional to the size of the company.

The single man startups I worked for would pay their invoices promptly, while multi-nationals seemed to consider "net 30" to mean they shouldn't even consider paying until 30 days after receipt, and seemed to have a policy that they wouldn't pay until hassled.

Re: Apple's Supply Chain Secret

#103

Post by tptacek »

JonWood wrote: post #102
binarray2000 wrote: post #96

Earlier quoted context omitted.

Well, I AM talking about the real world (note my post scriptum). Also, when you talk about small consultancies and Fortune 500 companies: I have worked for a small consultancy and, later, as a freelancer for German top companies (Deutsche Telekom, Deutsche Post, Munich Re - to name a few) and they all have paid, both that consultancy and me, within a month of which the consultancy/I have sent the invoice. USA is, jud…

Having worked as a solo freelancer in the UK my experience was that prompt payment is inversely proportional to the size of the company. The single man startups I worked for would pay their invoices promptly, while multi-nationals seemed to consider "net 30" to mean they shouldn't even consider paying until 30 days after receipt, and seemed to have a policy that they wouldn't pay until hassled.

We pay pretty much instantaneously too. There's a couple reasons why we're "good" at paying and F500s are "bad" at it (although in MBA terms, we're the ones who suck):

* We don't have a payments/procurements department, so "payment" usually means me, Dave, or our finance person just cutting a check.

* We derive no meaningful benefit from withholding payment (pennies of interest, versus hundreds of dollars of lost cycles).

At giant companies, carefully managing payables probably makes an enormous difference. When you say "operations excellence", stuff like how vendors are paid is one of the first things many people think of.

Re: Apple's Supply Chain Secret

#104

Post by binarray2000 »

tptacek wrote: post #99
binarray2000 wrote: post #96

Earlier quoted context omitted.

Well, I AM talking about the real world (note my post scriptum). Also, when you talk about small consultancies and Fortune 500 companies: I have worked for a small consultancy and, later, as a freelancer for German top companies (Deutsche Telekom, Deutsche Post, Munich Re - to name a few) and they all have paid, both that consultancy and me, within a month of which the consultancy/I have sent the invoice. USA is, jud…

All I can tell you is that in the US, very long delays before invoices are paid out are absolutely the norm . I didn't jump in because I particularly care how Apple pays vendors, but because many people on HN are considering freelancing and bootstrapping, and they should know: big companies are never going to pay them on time. Keep cash in the bank. Your comment about Apple's balance sheet is pretty silly.

Why it's silly?

Apple has 90 days of non paid supplies on the books (and $80 billion in the bank - "cash and investments" as stated in the article).

If they'd (OK... IDEALLY) pay all of them at once and continue paying supplies as they get delivered, only then would their balance sheet look realistic.

Or, am I missing something?

Re: Apple's Supply Chain Secret

#105

Post by akg1 »

dangrossman wrote: post #31
ars wrote: post #27

Earlier quoted context omitted.

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.

I read from the fingers of a farm owner about Wal-Mart regularly doing things like committing to buy all of a farm's output of some crop, setting a pickup date, then being days late and refusing to pay for what spoiled in the crates waiting for the truck that didn't come.

How can this be "regularly" happening? Wouldn't farmers stop selling to walmart if this happened even once?

And if they "committed" to buying all the output, why weren't there repercussions from breaking that commitment?

Re: Apple's Supply Chain Secret

#106

Post by herdrick »

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…

I read in the 90s that Microsoft's suppliers appreciated that MS never went the 'net 30' or 'net 90' route like other Fortune 500 corps and just paid as soon as they got the bill.

Re: Apple's Supply Chain Secret

#107

Post by AllenKids »

binarray2000 wrote: post #104
tptacek wrote: post #99

Earlier quoted context omitted.

All I can tell you is that in the US, very long delays before invoices are paid out are absolutely the norm . I didn't jump in because I particularly care how Apple pays vendors, but because many people on HN are considering freelancing and bootstrapping, and they should know: big companies are never going to pay them on time. Keep cash in the bank. Your comment about Apple's balance sheet is pretty silly.

Why it's silly? Apple has 90 days of non paid supplies on the books (and $80 billion in the bank - "cash and investments" as stated in the article). If they'd (OK... IDEALLY) pay all of them at once and continue paying supplies as they get delivered, only then would their balance sheet look realistic. Or, am I missing something?

Because under GAAP accounts payable (the money Apple owes its suppliers) is debt. Plain and simple.

Re: Apple's Supply Chain Secret

#108

Post by kooshball »

CoffeeDregs wrote: post #97

These kinds of articles were novel 10 years ago when Apple was coming back and was doing so while beating Dell at supply chain optimization and that was, justifiably, a huge story. Ironically, I read them in BusinessWeek back then, too. Now, the ODM/OEMs have become brands and the folks who once were the main participants in Apple's supply chain are now directly competing with Apple. Breathless articles aside, are we…

>Clearly, the majority of hackers disagree with me, so I'm convinced that 90% of Apple's incredibleness is their marketing (not ads, but understanding how to design and build excellent products which are very well targeted at their audiences).

That last sentence there doesn't make much sense at all. How is "understanding how to design and build excellent products which are very well targeted at their audiences" part of marketing? That's straight up design and engineering.

Re: Apple's Supply Chain Secret

#109

Post by zdw »

CoffeeDregs wrote: post #97

These kinds of articles were novel 10 years ago when Apple was coming back and was doing so while beating Dell at supply chain optimization and that was, justifiably, a huge story. Ironically, I read them in BusinessWeek back then, too. Now, the ODM/OEMs have become brands and the folks who once were the main participants in Apple's supply chain are now directly competing with Apple. Breathless articles aside, are we…

One minor nitpick - recent unibody Mac's have a slightly rounded, less "wrist razor" front edge on them.

Re: Apple's Supply Chain Secret

#110

Post by rdl »

2muchcoffeeman wrote: post #37
dotBen wrote: post #35

Earlier quoted context omitted.

Just to point out, if Apple did what I'm suggesting they would still achieve the same effect because the laptop would be on and thus shining through. It's only when it's off that they would miss out - but most of the time if my laptop is out of my bag then it's on.

If they did that, having the logo light up through aluminium would make an awesome ad.

I use a speck black satin plastic case on my air, and you see nothing when it is powered off, but the logo shines through when on.
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