Apple's Supply Chain Secret • Hacker News Board

Re: Apple's Supply Chain Secret

#141

Post by xenophanes » Sat, Nov 05, 2011, 2:02 AM UTC

dlss wrote: post #126

adamtmca wrote: post #124

Earlier quoted context omitted.

I never understand why people try to pass judgment on a transaction like this. Their suppliers are real businesses who are capable of modelling their cash flows and deciding whether or not this is profitable. No one ever stops and says, "wait.. it makes business sense to sell to Apple, but this is lame so let's not do it".

I think "no one" is a bit strong there. The article cites one company who walked away from a profitable $1B deal for a dressed up version of "but this is lame"

No, they said something a bit like that in their PR. They walked away because of cold hard decision making, economic forecasts, risk assessment, Apple demanding too high a price for iPhones, etc, nothing fluffy.

Re: Apple's Supply Chain Secret

#142

Post by jacoblyles » Sat, Nov 05, 2011, 5:04 AM UTC

Tangurena wrote: post #128

antoinehersen wrote: post #21

Earlier quoted context omitted.

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

One story that I think can help explain why many companies are stuck selling to Walmart is this one: http://www.fastcompany.com/node/47593/print The issue quickly becomes a "damned if you do, damned if you don't" issue. If you supply them, they quickly drive your margins to the point where you have to offshore to stay in business. If you don't supply them, you get cut out of the largest retailer in the US and lose th…

In other words, Wal-Mart requires that you use efficient, modern production techniques and they will help you implement them. But if you don't, they will find a competitor who will. Brilliant.

Re: Apple's Supply Chain Secret

#143

Post by Someone » Sat, Nov 05, 2011, 7:17 AM UTC

comedian wrote: post #130

AllenKids wrote: post #107

Earlier quoted context omitted.

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

Yeah this is very common and it's one of the reasons why Apple is so good at managing their cash. By delaying payments Apple can use the cash for other short-term investment opportunities. In Apple's case, their accounts payable is probably in the billions. As an example: If Apple has a $10 billion accounts payable and instead of paying it right away they waited for 3 months and invested that $10 billion on short-ter…

If those numbers are true, why does Apple bother making stuff? Their $80 billion in the bank should, according to your figures, make them $8 billion a quarter? Actual reported profit is $6.6 billion, so they must be losing over a billion on production and sales of stuff each quarter.

Re: Apple's Supply Chain Secret

#144

Post by atnan » Sat, Nov 05, 2011, 10:02 AM UTC

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…

The security at WWDC are Apple employees, according to the one I asked at WWDC08.

Re: Apple's Supply Chain Secret

#145

Post by gerrit » Sat, Nov 05, 2011, 11:01 AM UTC

bho wrote: post #114

bigiain wrote: post #64

Earlier quoted context omitted.

"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. No…

The lit-up logo is Not powered by a special array of LEDs, it's just the screen backlighting shining through a hole.

You can verify that by changing the display brightness, the logo will change brightness accordingly. Or just hold the turned-off laptop in front of a bright light source, the apple-shaped hole wil, be visible through the screen

Re: Apple's Supply Chain Secret

#146

Post by philwelch » Sat, Nov 05, 2011, 11:46 AM UTC

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…

Apple's bought parts on short term credit since it was Jobs and Wozniak in the garage. Though back then, it was because they were broke until they sold the Apple I's, and now it's because they're flush enough with cash that the time value of money favors the delay.

Re: Apple's Supply Chain Secret

#147

Post by philwelch » Sat, Nov 05, 2011, 12:08 PM UTC

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…

I wonder how much of the threat profile involves corrupt shipping workers and other inside jobs and how much involves grand iPhone heists.

Re: Apple's Supply Chain Secret

#148

Post by nikcub » Sat, Nov 05, 2011, 6:13 PM UTC

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…

If the manufacturers need the money they can sell the Apple debt for a few bp since the company is AAA rated

Re: Apple's Supply Chain Secret

#149

Post by cbsmith » Sun, Nov 06, 2011, 9:26 PM UTC

christoph wrote: post #117

JonWood wrote: post #102

Earlier quoted context omitted.

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.

Rule number #1 in contracting: factor in the interest costs for N days interest in to your price. Your contracts should factor in an exorbitant penalty (based on time-value of money for YOU, not the market place) for post "net N" days (I'm a big fan of 10% + 1% per additional day). Great video on this:

http://vimeo.com/22053820

Re: Apple's Supply Chain Secret

#150

Post by cbsmith » Sun, Nov 06, 2011, 9:27 PM UTC

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…

My understanding is that this is most of Costco's profit model too: they take merchandise on consignment for say 60 days, sell it all at cost within a week, and then invest the float.