The Apple Supply Chain: The Best in the World?

Thu Oct 11, 2012 4:22 pm (PDT) . Posted by: “syarwani” syarwaniThe Apple Supply Chain: The Best in the World?

by Steve Banker

Many supply chain professionals consider Apple’s supply chain to be the best in the world. I don’t.

The reasoning appears to be that since Apple is one of the fastest growing and most profitable companies in the world, it must surely have one of the best supply chains too. This is a “halo effect” fallacy.

Apple is the best in the world at innovative product development. Because the company develops hardware, software, and associated digital services—rather than just focusing on one dimension—it can provide an unmatched user experience. This allows Apple to capture high margins from its products and services. But by my definition, product development is not supply chain management; procurement, manufacturing, and logistics are.

That said, Apple has a fascinating supply chain that is very different from traditional supply chains. This supply chain comes with pre-built advantages and disadvantages.

On the advantage side, demand management is easier. Apple doesn’t have to get the demand forecast for a new product right. As long as it underestimates demand for a hot new product, Apple will have loyal customers clamoring for the new devices and willing to wait. In fact, the projected backlog leads customers to line up for hours before stores open to buy a new product. This helps to create marketing buzz.

Because Apple has become so large, it has procurement advantages smaller rivals can’t match. Financial analysts are beginning to focus on Apple’s supply chain. Samsung lost $10 billion in market value when Apple placed a huge order for flash memory with Elpida, securing more than half of that company’s supply. Apple reportedly has price advantages in securing key components, manufacturing capacity, capital equipment, and airfreight capacity.

Like other companies that have huge procurement clout, when Apple asks a supplier for a price quote, it demands a detailed accounting of how the manufacturer arrived at the quote, including estimates for labor and material costs and projected profit. Manufacturers can get hit with penalties for quality issues and warranty claims. Apple is becoming so big that even though it has a number of customized components that it has to pay extra for, the company’s cost structure is starting to resemble that of some of its rivals that only source common components.

But other parts of the supply chain become more difficult for a company that differentiates itself based on product excellence.

Apple works to lock up the supply of key components, particularly custom components, with exclusivity agreements. This serves to protect the uniqueness of its products. In some cases, Apple invests in capital equipment to make these special components (the company lends the production equipment to its manufacturing partner). At times this production machinery becomes Apple exclusive either because of exclusivity agreements or because Apple is so large that a backlog for the equipment becomes horrifically long.

Managing new product launches is also more important for a “fashion” manufacturer. The process from design to production launch typically takes 10 months. This includes sourcing, testing, government approvals (like FCC approval for an iPhone), and factory dry runs. For weeks prior to the launch, factories work overtime to build hundreds of thousands of devices. Then they work more overtime to clear the backlogs.

According to Apple’s supplier responsibility progress report, the company’s standard labor policy is for workers to work a maximum of 60 hours per week and to get at least one day off per week. And yet, at 93 of its suppliers, more than 50 percent of their workers exceeded these rather low limits. In fact, working conditions at Foxconn, Apple’s partner for final assembly and some core components, have been bad enough that Apple has gotten a bit of a black eye from press reports of accidents, suicides, and labor strife.

While the existing customer base has largely ignored these labor relations problems, the demographics of the people that buy Apple products indicate a concern for social responsibility. Further, the Chinese market is becoming very important to Apple, and closer Chinese governmental scrutiny could affect shipments.

What is different about Apple’s launch planning is the extreme secrecy attached to it. Apple places electronic monitors in some boxes of components to track them from Apple’s headquarters in Cupertino. The goal is to discourage leaks and ensure customer delight and surprise when the products hit the market. One article claims that Apple has shipped devices in plain boxes, even tomato boxes, to avoid detection.

But Apple, like many companies in the electronics industry, has a supply chain with a high-risk profile. 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.

In conclusion, Apple’s new CEO, Tim Cook, is a supply chain guy with a strong reputation. He is working to improve the company’s reputation for social responsibility. But if I were Apple, I’d rather have another product development guru like Steve Jobs. To drive continued growth and margins, the company needs to continue to excel at product development, but only needs to be competent in supply chain management. Unfortunately, there are not many Steve Jobs out there.

http://logisticsvie 2012/07/02/ the-apple- supply-chain- the-best- in-the-world/

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Pick to Light 2

Siang tadi kami bertemu dengan partner bisnis ATOP untuk Indonesia. Kami membahas tentang peluang kerjasama untuk mengembangkan market pick to light di Indonesia. Sebuah peluang yang sangat menjanjikan bagi kami. Tidak mudah untuk mengenalkan tools yang masih belum begitu dikenal di Indonesia. Tetapi beberapa group retail besar telah menggunakannya secara intensive. Kami melihat sektor industri manufaktur dan automotive belum terlalu mengenal konsep ini. Kami tahu bahwa konsep ini lahir dari konsep manufaktur western sedangkan di indonesia, manufaktur otomotif lebih didominasi oleh konsep manufaktur jepang. Tentu sangat menarik bagi kami bila kami bisa menjembatani kedua perspektif ini. Selalu ada optimisme yang menyelimuti peluang. Kami yakin bahwa produk ini akan sellable di indonesia.
Ingin tahu lebih banyak mengenai konsep pick to light, kontak kami atau email kami.

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How to Increase Open Rates 7% to 13%

Include the word “Video” in your emails subject line and it
can increase your open rates 7% to 13% according to the
2012 Digital Marketer Benchmark and Trend Report.

Video is delivering vast amounts of content to online users
every day. Just consider some of these statistics:

* 92% percent of worldwide internet users have watched
online video content according to Accenture.

* 181 million U.S. Internet users watched more than 39
billion online content videos in September 2012 shows data
from the comScore Video Metrix.

* The U.S. mobile video audience has increased 77% to 36
million viewers in the last two years finds Business Insider.

In addition to the popularity of video, it is highly effective at
conversion. Here are some additional statistics you should

* 52% of consumers who watch product videos say those
videos make them more confident about purchases, according
to Invodo.

* Online retail shoppers who watch video are 64% more
likely to buy compared to others reports comScore.

* 96% percent of IT decision makers and tech buyers watch
videos for business and 84% either forward, share, or post
tech-related videos reports an internal Cisco study showed.

When you put video links and/or embed video into your
email campaigns the results are impressive.

Video in your emails:

* Doubles click through rates of the email according to
Marketing Sherpa’s case studies.

* Triples click through rates according to Bronto and Implix

* Increase conversion rates 21% or higher finds a 2012
Experian report.

* Reduces opt-outs in introductory email campaigns by 75%
Eloqua found.

In light of the numerous benefits video can bring to your
email and sales process, there’s never been a better time
to start adding video’s to your email content.

What can you put into your videos?

Let’s review 8 easy video content ideas you can use to
make interesting videos for your subscribers.

1. Case Studies

Examine in a video top examples that illustrate the topic
you’re covering.

2. Day-in-the-life

Create a diary-style video that looks at what you do on
a day to day basis in your business.

3. Interviews

Reach out to others in your industry and conduct an
Interview. You do not even need to be face to face.
You can create video interviews using:


4. News and Commentary on Current Events

Right now you could put together an interesting informative
video about the proposed recent legislation that would
allow government agencies to read your emails!

5. Product Tours

Create a video that demonstrates how to use your product
or service.

6. Training Videos

Step-by-step videos that teach a person how to do something
are extremely popular.

What do you know how to do? Put together videos teaching
others to do it too!

7. Reviews

Review others’ products and services for interesting content.

Get other people – fans, consumers and colleagues involved
and ask for them to review your products / services.

8. Fun Personal Videos

Be creative and spontaneous sharing your own unique
personality and humor.

In the spirit of fun and the Thanksgiving holiday here’s
a short video I made showing some colored Turkeys racing
at a farm near our office.


Emailing Out Your Video

Once you have your video content ready to go, upload your
video to YouTube.

Embed the YouTube video onto your site.

Use an image in your email that when clicked links over
to the YouTube video on your site.

Send out your video email!


Start thinking about what video you can put into your next
email campaign to engage your subscribers!

Abbie Drew
DEMC Editor

P.S. Next week we’ll discuss tips and tactics on making
simple videos for your emails. Stay tuned.

Quote for today:

“Reach high, for stars lie hidden in your soul. Dream deep,
for every dream precedes the goal.” – Pamela Vaull Starr

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Asuransi Personal Accident

Semalam kami bertemu dengan mitra mitra usaha kami. Topik yang kami bawa dalam meeting adalah berkenaan dengan PA (personal accident), salah satu produk asuransi untuk karyawan.
Ada hal yang menarik dari sisi kami. Kami melihat dalam perspektif “proteksi” dimana kita memberikan perlindungan untuk karyawan kita dari kejadian yang tidak diharapkan baik saat berangkat kerja, selama ditempat kerja dan jam kerja, hingga kembali ke rumah.
Kata proteksi mengandung arti antisipasi dimana saat kejadian muncul, biaya yang timbul sebagian biaya dicover oleh fasilitas ini, tergantung besar kecilnya pertanggungan.

Cost and Benefit
1. Costnya adalah perusahaan mengeluarkan biaya rutin, yang sifatnya tidak dapat dinikmati hasilnya pada saat tersebut. Bisa dikatakan Expense.

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Resolusi 2013

Baru saja kami membahas tentang apa yang akan kami lakukan di tahun depan. Belum keseluruhan sih…baru satu dari beberapa point yang kami anggap penting untuk dibahas. Salah satu yang kami bahas adalah bagaimana melevrage kinerja penjualan kami. Kami melihat sektor retail memang memiliki daya magnet tersendiri. Bertahun tahun kami bermain di sektor industri dan pada hari ini kami merasa jatuh hati pada sektor retail ini. Menarik untuk dikupas dan tak habis untuk dibahas. Anyway…selamat datang sektor retail, semoga kami bisa memanfaatkan peluang.