Tuesday, January 21, 2014

Why is Apple named the best supply chain in the world?

In business, it’s always been about the customer. However, a consumer-driven supply chain is now the norm. The market is moving briskly to address the scenario of how to satisfy a consumer-driven supply chain and how to personalize products on a “one-each” level. For e.g. a customer may want an iPad mini in grey color with his named embedded on it in two days. Such customized demands of the consumer have to met by the companies to survive in the existing competition. Hence, companies not only have to produce, manufacture, assemble and customize products in a cost-effective manner but also deliver those products to consumers in a time frame sufficient for their needs. Passive companies failing to adapt to this type of supply chain will increasingly be at a disadvantage. They will lose out their market share to their competitors. This shall increase their cost as well. They will be stuck with too many or too few products, and the wrong mix of products. They won’t be able to service customers in a satisfactory manner either. To achieve such results, a company needs to employ right kind of staff with clearly set goals. Companies have to get people who have bought into a consumer-driven supply chain.

According to the annual supply chain ranking compiled by research company Gartner, Apple tops in the list. The rank is based on a range of factors, including financial performance, inventory and revenue growth, in addition to opinions. Apple has long been highly regarded for its innovative products, which combine advanced functionality, exceptional user experience and attention to detail in design. Apple is an industry leader in manufacturing cutting edge products that require innovative approaches to manufacturing. The factors that make Apple as a supply chain leader are:

·      Apple took steps early on to manage its supply chain and the suppliers within it. The company established a formalized list of expectations for suppliers and quickly moved on to creating exclusivity agreements in exchange for volume guarantees.

·      Over time, the company has developed relationships with suppliers, which has helped Apple quickly scale operations to customer demand for existing and new products. Working with its supply chain partners, Apple helped develop new manufacturing processes, some of which have been the subject of patents filed by the company.

·      In addition, the company has used its deep pockets to ensure adequate production capacity by placing high volume pre-orders with suppliers. This has also had the effect of preventing competitors from gaining access to the same manufacturing resources.


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