Leading computer and smartphone manufacturer Apple has topped Gartner’s global supply chain ranking table for the fifth consecutive year. The report accompanying the release of the rankings was impressive – a 20.2% return on assets coupled with a 51.5% growth in revenue on the previous year gave Apple an unassailable lead.
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August 29, 2012 in
Gartner, Report, Supply Chain, Supply Chain Management
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For the fourth year in a row, market analyst Gartner has rated Apple as having the world’s best supply chain. In their annual breakdown, Gartner examine the discipline, execution and value-added capacities of each of the 25 largest global corporations to produce the list which is now in its seventh year.
So how did Apple attain this latest accolade? The Cupertino-based computer giant is well known for its cut-throat pricing negotiations and obsessive supplier secrecy, which allows them to exert a high degree of control over the entire manufacturing process. Although they sell their own hardware, Apple manufacture very little themselves, choosing instead to outsource as much as possible.
One of the major tools used by Apple to ensure supply chain success is a willingness to invest heavily in every aspect of it; reports from Apple suggest that supply chain expenditure will almost double this year to $7.1 billion. Apple has found that massive expenditure on supply chain management is not only good for their business, but provides a significant advantage over their competitors too.
Back in 1997 when the original coloured iMac was released, Apple took the unusual step of buying up all of the available air freight around the Christmas period to ensure stores would be able to stock the computer. The move cost $50 million dollars, but it also hamstrung the opposition including Compaq, who were unable to secure any air transportation for their goods over the crucial holiday period. So successful was the move that Apple moved into ‘drop-shipping’ when the iPod was released, delivering goods to the customer directly from the factory and reducing lead times (and costs) yet further.
Since that time, Apple have managed to stay ahead of the opposition by taking a similar approach to every aspect of their supply chain. If a new manufacturing technique is identified, Apple sign exclusive supply contracts and invest further with the supplier to keep competitors playing catch up. Similarly Apple have the reserves to offer significant pre-payments to suppliers, obligating them to fulfil Apple’s product orders first. Because of this the lead time on certain parts increases, again delaying production and release of competitor’s offerings.
This attention to supply chain efficiency, ruthless negotiation and an awareness of the effects of their business actions on the competition are a significant part of what has allowed Apple to become the world’s most successful company. Apple invest heavily ensuring that their supply chain does exactly what they need, how they want it and in time to fulfil their customers’ orders proving that obsessive control does pay off.
The Gartner Supply Chain Top 25 for 2011 is the seventh year of their annual Supply Chain Top 25 Report. You can download a copy of the report from the Gartner website.
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December 7, 2011 in
Supply Chain, Supply Chain Integration, Supply Chain Management, Supply Chain Performance
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Technology research giant Gartner has released a series of estimates predicting the worldwide growth rates of Business Process Outsourcing (BPO). According to their report “Forecast Analysis: Business Process Outsourcing, 2010-2015, 2Q11 Update”, Gartner now calculate the BPO market will grow by 6.3% worldwide during 2011, slowing to 5% in 2012.
Cathy Tornbohm, research vice president at Gartner commented on the report’s findings saying, “Emerging markets are faring far better and, generally, multinational companies continue to look to BPO as a means both to reduce costs and to buoy their business operations during the protracted return to a growth environment. We also see an increase in transaction volume, especially in payroll, recruiting, accounts payable, and customer data analytics and knowledge process outsourcing (KPO) activities.”
Tornbohm was speaking in reaction to a weaker growth prediction for the North American region which is traditionally the world’s largest. Gartner put North American growth at just 3.8% which has had a negative effect on the total worldwide growth estimate.
The Western Europe market is expected to see continued demand from businesses for outsourced services in the CRM and finance and accounting domains. Gartner predict an annual growth rate of 8.9%, well above that of North America, but also lower than could be expected due to various cultural barriers slowing uptake.
The continued growth of the Asia/Pacific market however continues to outstrip expectations with BPO growth estimated at 17.9% in 2011 alone. Gartner have noted that almost every process which can be outsourced will grow in demand throughout the region until at least 2015, with a heavy demand for financial and accounting services and billing processes.
Latin America Business Process Outsourcing is also expected to grow at a healthy 14.7 percent as local subsidiaries of global corporations begin rollouts of integrated systems, causing a knock-on uptake by domestic businesses. Local labour rates remain relatively low in Latin America slowing uptake of BPO, although major investment by service providers looks set to change this situation.
Overall, Gartner suggest that the future growth of BPO looks relatively healthy in the coming years.
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October 6, 2011 in
BPO, Business Process Outsourcing, Gartner, KPO
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