What We Can All Learn From Apple

Over on Supply Chain Matters, Bob Ferrari reports that once again Apple has sent the benchmark for supply chain and overall financial performance. According to Bob, "Apple announced financial results for its fiscal 2008 second quarter ended March 29, 2008, announcing a blowout revenue and profitability picture (revenues up 43% and profits up 36%)." Bob believes that Apple preaches and practices an "agile and responsive supply chain, in spite of product supply and/or demand imbalances" and that "the latest quarterly results provide yet more evidence." Apples growth represents some "235,500 shipments per day, from Apple's direct sales outlets, retail partners, and other channels" and "Apple has additionally executed long-term supply contracts, in some cases up to the year 2010, for critical NAND memory and other supply." In other words, "Apple's ability to ramp and sustain extraordinary high volumes of shipments, flex with market conditions, while maintaining an edge in truly innovative products is a benchmark for supply chain excellence."

While I agree with Bob that we all have much to learn from Apple, we should not forget the supply risks that the innovative provider has taken to ring the most from its supply base, such as geographically concentrating suppliers in potentially natural disaster prone regions. In addition, the length and outsourced nature of the iPhone supply chain is not one that would make me sleep well at night if I was the supply chain manager responsible for it. So perhaps a better way to look at Apple rather than simply as a star supply chain and Wall Street performer is to describe it as an intelligent risk taker which so far has beaten the odds.

- Jason Busch

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