More on Apple’s Skill at Operations

A few weeks ago, I discussed a Quora thread explaining “how Apple sends technology back from the future.” The gist is that Apple is phenomenally good at managing its supply chain, particularly for innovative technologies that haven’t hit the market yet.

Bloomberg BusinessWeek expounds on that theme in its latest issue, beginning with the story of a green laser that Apple recently added to show whether MacBook cameras are on. Adam Satariano and Peter Burrows write:

Most of Apple’s customers have probably never given that green light a second thought, but its creation speaks to a massive competitive advantage for Apple: Operations. This is the world of manufacturing, procurement, and logistics in which the new chief executive officer, Tim Cook, excelled, earning him the trust of Steve Jobs. According to more than a dozen interviews with former employees, executives at suppliers, and management experts familiar with the company’s operations, Apple has built a closed ecosystem where it exerts control over nearly every piece of the supply chain, from design to retail store. Because of its volume—and its occasional ruthlessness—Apple gets big discounts on parts, manufacturing capacity, and air freight. “Operations expertise is as big an asset for Apple as product innovation or marketing,” says Mike Fawkes, the former supply-chain chief at Hewlett-Packard (HPQ) and now a venture capitalist with VantagePoint Capital Partners. “They’ve taken operational excellence to a level never seen before.”

Well worth a read.

One thought on “More on Apple’s Skill at Operations”

  1. Live by the supply chain, die by the supply chain. Logistics is critical in just in time manufacturing. When nature strikes as she did in Japan in March of this year, the reverberations are felt on the other side of the earth.

    The Thai floods are affecting hard drive supplies worldwide. One event can cascade into a chain of failure. Two or more events and things become even more untenable.
    Without having diverse second and tertiary sources for goods and services, companies and individuals risk failure and death.

    Globalization has weakened our individuality and self reliance and returned us poverty and cheap goods that aren’t really cheap. This won’t end well as anyone who knows “the trend is your friend”, can easily extrapolate a severe economic collapse in our life times and likely within this decade.

    When we look at Apple’s business practices, we should understand what it means when everyone attempts to emulate them, and just how rickety our supply chains have become.

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