Apple’s Inventory Management is a Global Best

There are many things that make Apple’s successful.The company has market value in the current world’s largest Trade Pool. Indeed Apple has the most appropriate hardware and software, premium brand positioning, customer care  but question is that  how to managed by apple ? 

More or less, we would’ve read a few articles explaining the success of Apple’s implementation but this articles barely mention one very important “love a good” contribution to the success of the Apple that is  the warehouse manager.

Career with Apple’s Tim Cook began almost simultaneously with Steve Jobs’s company NeXT and Apple’s return.At that time, Apple’s distribution system is a mess. Tim Cook was the first proposed model has changed, he has removed self-help models of Apple products to switch to the OEM model (the producers hired other processing products of the apple). On the other hand Tim Cook also found Apple’s warehouse was very rapid depreciation compared with no decline in value from 1% to 2% in a week.

Changes in production methods that apply to Apple’s Tim Cook has brought but certain success of the apple: 37 million iPhones have been sold in the fourth quarter of 2011. This indicates the ability of Apple’s warehouse management is extremely good to be able to meet the large amounts of goods sold that way. Before applying the model Apple outsourcing this production test Dell is the most successful customers through how to do this. But Apple was quickly exceeded Dell to become a warehouse management company of global best practices.

When it comes to the parameters of the warehouse, financial analysts often refer to two indicators. Only first argument is “decimal inventory cycle” (Inventory Turnover), this parameter indicates how many times the average inventory of a public company circulated in the warehouse of a company. If greater competition coefficients ie rotation speed of the quick inventory and freight companies will be selling. Conversely, if the coefficient is smaller low-speed rotation, it will hang out and was sold in more people to keep the number of times less than the stock exchange.

Formula to calculate Inventory Turnover.

The second parameter is the “separation time inventory liquidation” (Day of Inventory), which can measure the financial ability of the company. The index for investors to know about the time needed to liquidate the company may be out of your inventory (including goods are still in production process). Usually, if only low numbers, it means that the company works quite well.

The formula for calculating Days of Inventory.

When looking at the data sheet below you will see that the parameters on Apple’s inventory anagement was extremely well. The reason for this is because Apple chose Foxconn factories leased equipment manufacturer in China to manufacture his device. From then I can distribute your product to customers faster. Besides the huge amount of labor in its factories Foxconn also makes time the device manufacturer Apple is reduced significantly: only take a few days of receiving a user’s order delivered to Apple products in with other companies when they will need from one to two weeks.

Comparison Sheet Inventory Turnover and Days of Inventory between companies.

Source of Reference Material : PhoneArena

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Posted by Paracha on April 5, 2012. Filed under Apple, Articles, Technology. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry