How did Apple become a $600 billion company? It’s not just by having hot products and constantly innovating. It’s something much more basic – something every company should strive for.
It has the best inventory management in the world. That’s right. Better than Dell, Hewlett-Packard and other technology companies that have been synonymous with top inventory management in the past.
Impressive Numbers
According to a Motley Fool article, Apple averages just 5.3 days worth of inventory on hand at any given time. That’s almost half of the closest company Dell’s 10.2. What this means is that every five days, Apple needs to replenish its inventory to prevent stockouts. Apple is able to pull of this incredible logistical feat because it has invested so heavily in its supply chains and inventory management.
Losing Value Fast
Why is it so important to keep as little inventory on hand as possible? Because it costs companies money every day they store products in their warehouses. Not only that, but with technology always improving, high-tech manufacturers can’t afford to keep too many products in stock because a sudden announcement from a competitor or a new innovation could change everything and suddenly bring down the value of their products. It’s important to remain flexible.
Apple’s Secret Sauce
The secret to Apple’s success is their obsessive control over their inventory. They’ve discovered that the best way to control costs and meet their customers’ needs is to find the right balance of inventory in locations across the country and the world.
Few companies reach Apple’s size and complexity. They have to manage thousands of locations and supply chains. You probably only have to worry about a fraction of that number. Even though you’re smaller, you can see just as many benefits to your business as Apple enjoys by using inventory management to your advantage. Get started by finding solid inventory management software.
Who knows – maybe you’ve got an idea that can make your business the next Apple. To get there you just need the right focus and the right inventory management tools.
QuickBooks Manufacturing Blog 