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Apple has some of the hottest selling consumer electronics on the market, a credit to the company's sleek designs and skillful marketing.
But there's one aspect of its success which also deserves recognition — its supply chain. In the past Apple has been criticized for its inability to meet or accurately predict market demand. But that’s the past. With the introduction of the iPhone, and the constant improvement of its digital iTunes delivery model, the company has shown it knows how to operate a supply chain that is both innovative and cost effective.
In fact, Apple earned top honors in a ranking of the Top 25 Supply Chains of 2008, announced by Boston-based research firm AMR Research. It actually jumped up from second place in 2007, displacing Nokia at the top of the list and edging out other supply chain leaders such as Dell, Procter & Gamble, IBM, and Wal-Mart. .
"Apple took the top spot in 2008 with a business based on an intoxicating mix of brilliant industrial design, transcendent software interfaces, and consumable goods that are purely digital," AMR said in announcing its list. "The mechanical and financial benefits of this approach include extremely high inventory turns, minimal material or capacity limitations to growth, and excellent margins.
"Behind the scene moves like tying up essential components well in advance and upgrading basic information systems have enabled Apple to handle the demands of its rabid fan base without having to fall back on their forgiveness for mistakes."
AMR determines its annual Top 25 rankings based on a combination of financial metrics, and peer opinions. The financial component makes up 60% of the weighting, with companies measured on return on assets, inventory turns, and revenue growth. The opinion weighting is made up of two components, each worth 20%: a panel of AMR analysts and a peer panel consisting of industry supply chain experts.
Perhaps the biggest surprise in this year’s rankings, was Dell’s re-emergence into the Top 25. In fact, it went from not making the list in 2007 (partly due to a restatement of its financials) to climbing all the way up to the No. 3 spot. Nokia came in at No. 2.
“Although peer and AMR Research opinions of Dell are lower than its final ranking, very high inventory turns (41.9) and solid ROA (10.7%) have pulled the one-time champion of these rankings right back into contention,” AMR said in its analysis.
The following is the list of the Top 25 for 2008 along with rankings for 2007. Those marked N/A did not make the list in 2007.
| Top 25 Supply Chains of 2008 |
|
Company |
2007 Rank
|
| 1 |
Apple |
2 |
| 2 |
Nokia
|
1
|
| 3 |
Dell |
N/A |
| 4 |
Procter & Gamble
|
3
|
| 5 |
IBM |
4 |
| 6 |
Wal-Mart
|
6
|
| 7 |
Toyota Motor
|
5
|
| 8 |
Cisco
|
11
|
| 9 |
Samsung
|
10
|
| 10 |
Anheuser-Busch
|
7
|
| 11 |
PepsiCo
|
15
|
| 12 |
Tesco
|
8
|
| 13 |
Coca-Cola
|
13
|
| 14 |
Best Buy
|
9
|
| 15 |
Nike
|
18
|
| 16 |
SonyEricsson
|
N/A
|
| 17 |
Walt Disney
|
N/A
|
| 18 |
Hewlett-Packard
|
21
|
| 19 |
Johnson & Johnson
|
14
|
| 20 |
Schlumberger
|
N/A
|
| 21 |
Texas Instruments
|
17
|
| 22 |
Lockheed Martin
|
22
|
| 23 |
Johnson Controls
|
16
|
| 24 |
Royal Ahold
|
N/A
|
| 25 |
Publix Super Markets
|
23
|
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