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Apple's Supply Chain Secret

businessweek.com

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Re: Apple's Supply Chain Secret

#111

Post by cube13 »

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 suppliers don't need that much of a warehouse, either. Let's assume that Apple is forecasting that 100,000 iPods per week will meet demand. They go to the supplier, and tell them that they need the screens delivered at 100,100 per week(assuming that a very high .1% of all screens are defective, after the supplier's QA). The supplier gets their factories producing around that number per week, and ships them out immediately. Apple takes them in, and immediately produces iPods with them, where they the go out to retail. This way, neither Apple nor the supplier need to keep more than a week's worth of stock.

The reason that Apple keeps a similar deal with another supplier is if anything goes wrong with the other company. So in the previous example, if in week 5, Fukushima happened, and the first company was unable to keep production up, Apple could go to the other supplier and keep up production, with a very short(maybe a couple of weeks) delay. This is vital, since Apple doesn't maintain that much inventory of new parts.

The other benefit to this setup is that it allows Apple to almost instantly double their supply inputs for new product releases or for the holiday season. If necessary, Apple can use both suppliers to get 200,000 screens per week, then just rent a few warehouses for the temporary storage of new products or the holiday rush inventory.

Re: Apple's Supply Chain Secret

#112

Post by [deleted] »

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.

[deleted]

Re: Apple's Supply Chain Secret

#113

Post by viscanti »

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.

90 days is pretty standard. Some companies offer a discount if accounts are paid early. There's no indication that's the case here, so Apple is likely paying when they're supposed to.

Re: Apple's Supply Chain Secret

#114

Post by bho »

bigiain wrote: post #64
kgermino wrote: post #26

Earlier quoted context omitted.

Not to mention that, while it would be cool and notable (and maybe worth it for that alone) making the logo invisible when the computer is turned off eliminates a marketing opportunity. The simple Apple logo against a plain backdrop provides a clean advertisement for Apple. Removing the logo removes the distinctiveness of the computer when it is turned off. Also, I'm not sure how the computer would look without a log…

"The simple Apple logo against a plain backdrop provides a clean advertisement for Apple. Removing the logo removes the distinctiveness of the computer when it is turned off." It still took them a while to put them on the right way up. The first few laptops they sold with the Apple logo on the lid, they were oriented so they were "right way up" for the user when the lid was closed. That made them all upside down in a…

In the future, they should create the microholes and keep the logo dimly lit in the orientation that faces the user when they open the laptop. Once the laptop is open, the array of LEDs could change to make the logo oriented the current way.

There is already something similar on one of the numerous android handsets out there where the 4 hardware keys turn 90 degrees when you switch from portrait to landscape mode. Not quite as polished, but similar in concept.

Re: Apple's Supply Chain Secret

#115

Post by Dylan16807 »

danssig wrote: post #59
look_lookatme wrote: post #56

Earlier quoted context omitted.

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 P…

See what? I can't find what you're referring to.

Re: Apple's Supply Chain Secret

#116

Post by joezydeco »

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…

My brother worked logistics for a large company that supplied product to WalMart.

Their distribution centers have timeslots for incoming trucks measured in ten-minute increments. You miss your ten-minute window to park the truck, you're locked out until they can find a space to fit you in.

Re: Apple's Supply Chain Secret

#117

Post by christoph »

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.

Tell me about it... sometimes I'm lucky to even have a PO (purchase order) number to put on the invoice, 30 days after I've completed the work with large companies.

The payments department won't even look at the invoice if it's missing that.

Re: Apple's Supply Chain Secret

#118

Post by nickheer »

gnaffle wrote: post #41
jvdh wrote: post #32

Earlier quoted context omitted.

Actually, I think that the sleep-light on the MacBook Pros came first. The small bar of light that's right next to the IR receiver on the front-right of the body. That bar is actually a series of those small holes to let the light through. The green light for the metal casing came later IIRC.

The green iSight light predates the unibody MacBook Pros. At some point they changed it from a visible hole to small invisible ones. Those laptops still had the sleep-light on the "opening button" in front (this button and the self-hiding magnetic latches were removed on the unibodies).

They changed it with the mid-2007 MacBook Pro. Prior to that they had a tiny hole to the right of the iSight.

Re: Apple's Supply Chain Secret

#119

Post by tomelgin »

furyg3 wrote: post #50
forgottenpaswrd wrote: post #48

Earlier quoted context omitted.

"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.

I din't pull out a microscope, but I did wonder why they didn't implement this for all the lights (battery-level indicators on the side, charging indicators on the power supply connector).

The battery lights display useful information by being visibly off. When you see 7 dots light up, you need to be able to see the 8th dark hole to know it's at 7/8 charge and not 7/7 or 7/10. Similarly for the charging indicator: when it's not charging, you want that to be obvious.

Arguably, knowing that the laptop camera (or the wireless keyboard bluetooth pairing) is not active is not as useful information.

Re: Apple's Supply Chain Secret

#120

Post by pooriaazimi »

swombat wrote: post #52
forgottenpaswrd wrote: post #48

Earlier quoted context omitted.

"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)

they're talking about the GREEN indicator, on top of the screen (which shows the iSight camera's status), not about sleep indicator (the WHITE, rectangular thing, beside the IR receiver).

http://venturebeat.files.wordpress.com/2011/11/macbook-air-w...

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