Logistics and Tactics of Apple

Apple used to unveil its next fleet of iPhones in the month of September. Everybody will rush to their nearby to buy their one Apple stores all over. For Apple, it means that they have some days to ensure that millions of iPhones originating from China were ready for purchase at storefronts worldwide. It is a logistical exercise on the grandest of scales especially considering that Apple routinely sells millions of new devices during launch week. Apple begins that process before they are unveiled to the public moving large shipments of iPhones to distribution centres around the world. Naturally, these shipments are steadily monitored by security guards at all times from truck depots, airports, customs, and storage warehouses until the product is finally unveiled.

Logistics management of Apple is very efficient in shipping finished products across the globe. Another aspect to the logistics machine that isn't often discussed namely getting all the devices components together so that the assembly process can begin. Apple certainly does more than one thing, they do have a relatively small variety of products. This is a departure from how things looked in 1997 when Steve Jobs took over at Apple. Jobs drastically reduced the number of products offered by the company from 350 to just 10. It was a bold move but in terms of managing the supply chain, it was very impactful. Today's current number of Apple products is just five with fifteen variations of each. Those products share many common components which further streamlines the supply chain.

It's no surprise that a company known for innovative technology would embrace the use of technology in managing its supply chain. Apple does an outstanding job in this area through supply chain monitoring technology, Apple can divert products from assembly origin in China to wherever it is needed to be based on sales. This is a good example of the value that can be derived by utilizing available software to monitor the movement of cargo. Knowing where the inventory at all times allows for continuous adjust based on need. Around 200 suppliers are providing some 97% of materials used in Apple's manufacturing process.

Consider Apple’s size this isn't particularly a large number. By keeping the list relatively small Apple can guarantee their suppliers certain production volumes in terms of materials purchased to meet their demands. This goes a long way towards building strong relationships for this list of exclusive suppliers. Stronger relationships also mean that Apple can maintain close control of standards. The company has a supplier code of conduct and supplier responsibility standards which are intended to ensure that suppliers follow apples principles and values. Of course, it also means that Apple has considerable leverage in negotiating contracts with their suppliers.

In 1997 with the iMac was released just in time for the holidays, Steve Jobs cornered so much of the available airfreight capacity that Compaq, a competitive rival, was unable to ship their goods in time for holiday shopping. This tactic serves Apple so well that more than a year ago a spokesman for the international air cargo Association said the new iPhone launch is going to be a massive boost to air cargo. This proved to be accurate when the iPhone 6 released took place in August 2014 nearly all air capacity was booked for more than two weeks from China into the US. This strategy has worked for two reasons, Apple has ensured that space needed to move their product and at the same time they effectively prevent competitors from moving their handheld devices until later in the season. More than four million iPhone successes were sold in pre-order within the first 24 hours alone in 2016.