Apple’s fine-tuned supply chain is legendary, but we are just now getting a glimpse into its inner workings. As supply side wonk turned CEO Tim Cook Tuesday unveiled a new line of iPhones, an intriguing report revealed the coordination required to get the handsets to your local Apple store.
Using mammoth chartered jets and schedules so elaborate they almost make D-Day seem like a Girl Scouts delivery route, iDevices designed in California and built in China arrive in the US without a second to spare. A former FedEx executive likens it all to a Hollywood movie premiere…
“The process starts in China, where pallets of iPhones are moved from factories in unmarked containers accompanied by a security detail,” reports Bloomberg, which interviewed a number of Apple insiders.
The containers are then loaded onto trucks and shipped via pre-bought airfreight space, including on old Russian military transports. The journey ends in stores where the world’s biggest technology company makes constant adjustments based on demand.
The brainchild of Cook, the complex operation is now managed by Michael Seifert, formerly of Amazon.com. Seifert answers to Jeff Williams, senior vice president of operations for Apple.
Apple’s unofficial air force is a fleet of chartered Boeing 777s able to carry around 450,000 iPhones at a price of $242,000. Unlike the days when most cargo went by sea, Apple is able to save money by packing the jets full of the expensive and lightweight smartphones.
Apple hasn’t always been jetting its products around the world. For the first iPods, Apple used an old Russian transport plane to deliver the gadgets, one unnamed source told the news service.
Whatever the mode of transport, flights fan on to destinations around the world, all accompanied by security people and designed to arrive at the same moment. The design process follows an equally detailed plan.
When a product is first designed, Apple orders the necessary parts. From there, Apple oversees delivery of components to its assembly partners in China. At the same time bean counters develop an elaborate forecast for potential demand.
Orders for the new phones – including color choice and special engraved messages – appear right at factories in China, where the items are assembled and placed alongside orders destined for nearby locations.
iPhone 5 shipment pictured at a FedEx distribution center.
“People like to talk about how the key to Apple’s success is their products,” said Mike Fawkes, HP’s former supply-chain leader. He said Apple’s “operational capabilities, and their ability to scale and bring new products to market efficiently is unprecedented and is a huge competitive advantage.”
Microsoft’s tablet efforts has become the poster child for why product planning is important. The company recently was forced into a $900 million writedown because they did not foresee all of the unsold Surface devices. Apparently, Microsoft recognized the mistake as well, deciding to purchase Nokia for its hardware experience.
Just as Steve Jobs’ ability as a showman and salesman fueled the initial launch of the iPhone, iPad and iOS, Cook may have been the perfect choice to oversee the company’s expansion, delivering smartphones, tablets, digital music players, computers and more to the world with unmatched efficiency.