The iPhone 5 and Supply Chain Management Lessons

Meagan Douglas
Thu, Sep 27, 2012

Companies that fail to see the benefit of implementing and using supply chain management software should look to Apple to see how confidence in the supply chain can drastically improve a business's earnings potential.

A major factor in Apple's success is its highly-touted new product rollouts. However, in order for the releases to generate a profit, the company needs to make sure that supply meets demand. For example, in order for the official release of the upcoming iPhone 5 to be a business success, all of the parts need to come in on time for manufacturing. If a part such as the screen or the case is delayed for any reason, the entire launch can be put in jeopardy, according to Forbes.

"Apple, like many companies in the electronics industry, has a supply chain with a high-risk profile," Steve Baker wrote in a July article on Logistics Viewpoints. "Many of its key components come from northern Taiwan, the company sole sources several customized components, and it relies on massive factories located in Shenzhen, China for final assembly. Any sort of man-made or natural disaster at any of these sites could potentially grind Apple’s supply chain to a halt."

However, effective supply chain management can help mitigate any issues that could arise for companies implementing a similar strategy - and the payoff could be tremendous. According to Reuters, Apple CEO Tim Cook has emerged as a worthy inheritor to Steve Jobs largely because he has placed an emphasis on making sure the company is able to "maintain its product rollout schedule and avoid huge blunders." 

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