Achieving Purchasing and Supply Chain Benefits

When the pieces come together, can the assumption of a supply chain orientation with the right kinds of activities really produce the results envisioned by proponents? Consider the rebirth of Apple Computer, which had BusinessWeek asking in 1997, “Is Apple mincemeat?” Apple made a great comeback through an impressive, steady stream of new and innovative products such as the iPod, iPod Nano, iPhone, iPad and the new iPhone4. Apple has reengineered itself from being considered “mincemeat” to now once again being the “darling of Wall Street.” Facilitating this turnaround was Apple’s pursuit of an impressive array of purchasing and supply chain activities to manage product demand, inventory investment, channel distribution, and supply chain relationships. The company reduced its product line by almost half, forecasted sales weekly instead of monthly with daily adjustments to production, and relied on suppliers to manage inventory for standard parts and components. Apple also formalized a partnership with a supplier to build components close to Apple facilities with just-in-time (JIT) delivery, created a direct ship distribution network through the Web, and simplified its finished goods distribution channel. Because of these activities, Apple now rivals, and sometimes exceeds, Dell Computer in terms of supply chain performance.