Apple Beats Competitors at Inventory Turn Over

| News

Despite a weakening economy and a need to meet customer demand, Apple has been able to maintain a fast inventory turn over rate. The Mac and iPhone maker is sitting at five days worth of inventory on any given day, beating Dell's seven days worth of inventory, according to data from UBS.

Other PC makers are having even more trouble matching Apple's inventory efficiency. Lenovo, for example, is averaging 15 days of inventory, and HP is sitting at 32 days. Intel, however, is showing a much slower inventory turnover rate at 89 days, and D-Link is sitting on a staggering 131 days worth of inventory.

Apple's quick turnover rate may have been due in part to preparing for its just announced iMac, Mac mini and Mac Pro updates. The company released new desktop computer models on March 3, and keeping inventory low helped assure that there would be fewer of the previous model machines sitting on store shelves.

While maintaining a higher inventory level can help a company cope with sudden increases in demand, it can also show a company's inability to adequately gauge market interest in their products. For now, it looks like Apple is managing inventory better than its competition.

[Thanks to setteB.it for the heads up.]

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2 Comments

gslusher

While maintaining a higher inventory level can help a company cope with sudden increases in demand, it can also show a company’s inability to adequately gauge market interest in their products. For now, it looks like Apple is managing inventory better than its competition.

Gauging market interest isn’t necessarily a major part of the process. Much more important is the ability to adapt quickly to changes in sales. Apple prides itself on a very short time from manufacture to sales. They use various forms of inventory management gathered under the general category of “just in time” to do this. This means that they don’t have to keep a high inventory. (The ideal inventory turnover time would, of course, be zero: the item would come off the assembly line and be handed to the purchaser.)

Inventory Management Guy

The issue here is partly one of product demand (very high) and partly one using sophisticated inventory management systems.

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