Apple understands the power of efficient supply chain management. The devastating earthquake that hit Japan, destroyed lives and hampered much of the country’s manufacturing industry had little effect on Apple’s sales and production. Apple’s competitors, such as Sony and Motorola, haven’t fared nearly as well, struggling to get the products they need to meet demand.
How has Apple been able to enjoy a steady flow of supplies, even in the most difficult times? Here are three reasons:
Apple has remarkably few products. You can count them on one hand: iPad, iPod, iPhone, Mac and Apple TV. The company knows its core competency, and it hasn’t strayed too far from its high-tech focus. Because Apple is so focused on what it does best, it’s able to streamline its operations and specialize in doing what it does better than anyone else. Because it has such a small product lineup, Apple can also develop exclusive relationships with its suppliers.
2. Huge Consumer Demand
It’s every company’s dream to have a hot-selling product. Apple just so happens to have several of those. Steve Jobs is definitely doing something right. To keep up with its rapidly rising demand, Apple has become one of the largest high-tech buyers in the world. Apple’s suppliers know a good deal when they see one, so they’re eager to keep it supplied, even if it means putting Apple’s competitors on a waiting list.
3. Smart Use of Resources
Apple has wisely used the revenue it’s generated over the past few years from its successful products. It has cultivated strong relationships with its suppliers, kept enough cash on hand to handle challenges, and invested in products its customers really want. Because of its focus on keeping costs down and maintaining strong supply chains, Apple has been able to charge a lower price than almost any of its competitors for comparable products.
These are three of the biggest reasons why Apple is so successful with its supply chain management. Apple’s inventory management system and impressive supply chains keep it well-stocked with all the parts and products it needs to stay on top of its market. If Apple thinks it’s so essential, how important do you think supply chain management is to your business?