Apple’s supply chain is number one in the world

Apple is renowned for innovation. Everything about it is the talk of the town. The only things that are more impressive than the multinational technology company’s financial results are the products that come off the production line. Apple has been rewarded countless times for its game-changing products. Besides the iPhone, mention can be made of the Apple TV and the AirPods.

Not many know that Apple is skilled when it comes to handling inventory. You order something online and the product is shipped directly from China. The best part of all is that they don’t even look at it. Apple’s staggering success can be attributed to the way they control the inventory.

Extremely organized, Cook’s job at Apple really made a difference

Tim Cook became the Chief Executive Officer of Apple in 2011. He initially joined the company back in 1998. Following his return, Cook managed to put things in order, streamlining the supply chain. As a matter of fact, he created what we can safely call one of the most powerful supply chains worldwide.

Tim Cook is of the opinion that smartphones, tablets, and laptops depreciate really fast, losing approximately 2% of their value every week. Basically, they don’t hold onto their value for a long time. This is precisely why it’s important to eliminate the extra costs from the supply chain.

iPhone X with AirPods
Image source: https://www.pexels.com/photo/silver-iphone-x-with-airpods-788946/

Apple sells products through retail stores, web-based stores, direct sales force, wholesalers, carriers, and third-party sellers. Last year – in 2019, that is – the multinational technology company’s revenue amounted to 260.17 billion, according to Statista. Much of this success can be attributed to outsourcing manufacturing and, most importantly, reducing inventory levels.

Distribution channels exist in California, where the central warehouses and call centers are located. When the product comes to the end of its useful life, it’s sent to a close-by store or recycling facility. Anyone who knows Apple’s Tim Cook knows that he is a very organized person.

Tim Cook’s management style is different from that of Steve Jobs. Cook promotes transparency and teamwork, not to mention that he tends to have a chill demeanor. It doesn’t come as a surprise that he is the most powerful man in Silicon Valley. Tim Cook has been extraordinary in managing Apple’s inventory. Apple represents a good example for companies who want to get ahead of the game.

How does Apple effectively manage inventory?

It’s essential to maintain consistency between consumer priorities and competitive advantage strategy, not to mention supply chain capabilities. A company can fail without a solid strategy in place. Apple has found the formula for success. They are responsive and flexible to customer needs while preventing disruption that is caused by inventory.

Efficiently running the supply chain enables the tech giant to quickly deliver product to the end user at a reasonable cost. IT research firm Gartner constantly ranks Apple’s supply chain as the best and for good reason too. If you’re curious to discover the secrets, please continue reading.

  1. Apple maintains good relationships with their suppliers. What Apple does is acquire the necessary components and materials from several suppliers, which are forwarded to the assembling line based in China. The products are later on shipped to consumers who purchase the goods through the online store. The long-term relationship works for both the company and its suppliers.
  2. Apple relies on a closed ecosystem. Apple has full control over supply chain activities. We don’t know if the multinational technology company is deploying supplies & supplier management software, but it’s highly likely it does. A solution of this kind helps consolidate data and activities in a secured manner. Apple determined that distinct techniques and approaches are necessary.
  3. Apple accurately forecasts product demand. Predictions of demands and terms are no longer a luxury. They’re a necessity. It’s imperative to predict what products customers will buy and what technologies will be in demand in the years to come, something that Apple has become skilled at. Surprisingly, the company doesn’t believe in market research. It never makes something that’s common on the market.

Safeguarding quality in the supply chain

Supply chain management impacts the overall profitability of a company, as well as product quality. Speaking of which, there is no denying the fact that Apple products are qualitative. They are more expensive as compared to what the competition offers, but the pricing reflects the products’ value. The assortment of items offered includes high-end products like the iPad mini 5.

In their daily business, people at Apple make great efforts to meet customer expectations with products of outstanding quality. The multinational technology company works closely with suppliers, enforces high-quality standards, and maintains transparency along the supply chain. Now and in the future, Apple will continue to lead the way when it comes to innovation and handling the flow of goods.