Apple Supply Chain
As brilliant as Steve Jobs is, and he deserves every accolade used for Apple's turn-around shortly after his return to the helm, there was more to the story. Just as he teamed with co-founder Steve 'Woz' Wozniak to create a synergy that reinvented the world of computers, Jobs lured Tim Cook away from Compaq with a $500,000 sign on bonus.
Why? Cook understands the supply chain of manufacturing like few others.
In 1997, Apple was turning inventory just ten times a year. Dell 40! Cook said, "We're looking at how to leapfrog them and be better." A tribute to the oft misunderstood slogan, "Think Different." Cook was able to transition Apple to over 180 turns per year, and closed December 1998 with just two days of inventory. According to the IndustryWeek article ("What's Really Driving Apple's Recovery" Publication Date 3.15.1999), Dell finished December with seven days.
One important note perhaps wasted on everyone, except the corporate bean counter, is the metric that Apple went from $437 million dollars of inventory at the end of their fiscal year in 1997, to just $25 million by the end of December 1999. This is profound. FASB may be your accountant's friend, but they are no friend to executives needing measures to direct operations. The impact of this change alone on a company's financial statements would require massive doses of aspirin to explain!
So what?
Ever have one of those moments, when time stops, and you hear something? Or see something that you missed? Doing some research on Supply Chains within Distribution for the upcoming Viable Vision Offer to be held in Raleigh, North Carolina next month, I was watching the GSP videotape on Distribution and Supply Chain and heard Eli Goldratt mention this IndustryWeek article. I never bothered to look it up. Until today.
Constraints Management works. Even if no one bothers to call it by name. Rooted in cause and effect logic, Goldratt's Theory of Constraints is more than just common sense. Think Different.
It can be profound.
-ski
Saturday, April 08, 2006
Apple Supply Chain circa 1999
Apple Supply Chain
As brilliant as Steve Jobs is, and he deserves every accolade used for Apple's turn-around shortly after his return to the helm, there was more to the story. Just as he teamed with co-founder Steve 'Woz' Wozniak to create a synergy that reinvented the world of computers, Jobs lured Tim Cook away from Compaq with a $500,000 sign on bonus.
Why? Cook understands the supply chain of manufacturing like few others.
In 1997, Apple was turning inventory just ten times a year. Dell 40! Cook said, "We're looking at how to leapfrog them and be better." A tribute to the oft misunderstood slogan, "Think Different." Cook was able to transition Apple to over 180 turns per year, and closed December 1998 with just two days of inventory. According to the IndustryWeek article ("What's Really Driving Apple's Recovery" Publication Date 3.15.1999), Dell finished December with seven days.
One important note perhaps wasted on everyone, except the corporate bean counter, is the metric that Apple went from $437 million dollars of inventory at the end of their fiscal year in 1997, to just $25 million by the end of December 1999. This is profound. FASB may be your accountant's friend, but they are no friend to executives needing measures to direct operations. The impact of this change alone on a company's financial statements would require massive doses of aspirin to explain!
So what?
Ever have one of those moments, when time stops, and you hear something? Or see something that you missed? Doing some research on Supply Chains within Distribution for the upcoming Viable Vision Offer to be held in Raleigh, North Carolina next month, I was watching the GSP videotape on Distribution and Supply Chain and heard Eli Goldratt mention this IndustryWeek article. I never bothered to look it up. Until today.
Constraints Management works. Even if no one bothers to call it by name. Rooted in cause and effect logic, Goldratt's Theory of Constraints is more than just common sense. Think Different.
It can be profound.
-ski
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