Apple’s Supply-Chain

November 4th, 2011

There’s little doubt that Apple has the most well managed supply chain in the world:

That mentality—spend exorbitantly wherever necessary, and reap the benefits from greater volume in the long run—is institutionalized throughout Apple’s supply chain, and begins at the design stage. Ive and his engineers sometimes spend months living out of hotel rooms in order to be close to suppliers and manufacturers, helping to tweak the industrial processes that translate prototypes into mass-produced devices. For new designs such as the MacBook’s unibody shell, cut from a single piece of aluminum, Apple’s designers work with suppliers to create new tooling equipment. The decision to focus on a few product lines, and to do little in the way of customization, is a huge advantage. “They have a very unified strategy, and every part of their business is aligned around that strategy,” says Matthew Davis, a supply-chain analyst with Gartner (IT) who has ranked Apple as the world’s best supply chain for the last four years.

What allows them to even do that is they are so focused around a few products and such a tightly unified company. If Apple was structured into basically autonomous divisions that made decisions based on what’s best for them, their operations strategy would be impossible. Apple is reaping the benefits of a focused company.