I ran across an interesting article by Thomas Wailgum writing for www.cio.com that poses the interesting question: How did Apple’s Supply Chain Fare during the 3G Rollout?.  What I found interesting is that the article umbrellas Apple’s physical supply chain with its so called digital supply chain, the IT resources and web infrastructure that also needs to support a global product launch of epic proportions.

First, in full disclosure, loyal Supply Chain Matters readers are well aware that I have been a long-time admirer of Apple’s physical supply chain capabilities. This dates back to well before my former employer, AMR Research, placed Apple in the premier top position of its 2008 Supply Chain Top 25 ranking

In a previous April post, I observed that there may be a lot of global companies that would enjoy dealing with Apple’s challenges of having to manage limitless global customer demand, volumes in the millions of units, supported by a global supply chain that is for the most part, outsourced.  I also posed the challenge question that we should look forward to how Apple responds to its upcoming product launch.

We can now observe that the launch of Apple’s latest iPhone has exceeded all expectations in terms of consumer hype.  Apple declared on July 14 that it had sold one million iPhones from the Friday launch to Sunday, whereas it took 74 days to sell one million of the original iPhones.  And so I ask, if you were responsible for supply chain planning for Apple, would you be planning supply based on previous history of the iPhone launch, or what the marketing and sales groups were telling you based on constant market sensing?  I therefore concur that Apple’s physical supply chain has done an extraordinary job of supporting this latest product launch.  And even though most Apple stores are running low on current inventory, it’s an enviable problem for any consumer electronics company to have.  My response to those consumers who are griping about 3G iPhones being out of inventory at Apple stores, is that you should have expected the obvious.

But let’s get back to the essence of this article’s observations.  No doubt there were glitches on the digital support side of launch, with the barrage of activation and application download demands placed by new 3G iPhone owners.  I have to agree with the observations made by Kevin O’Marah of AMR Research that there are not too many companies that need to manage the convergence intensity of physical and digital supply chains today.  But with market differentiation moving more and more to consumer mass customization, these combined capabilities will become more of a future consideration for many other companies.  This will also re-fuel organizational turf wars as to what constitutes end-to-end supply chain operations, and who in the organization, the CIO, or the CSO has ultimate accountability for a successful market launch. I plan to dedicate some future posts to this topic.

For the time being, let’s continue to envy Apple’s dilemma, and praise all members of Apple’s extended supply chain team for supporting a successful product launch. 

What do you think?  Has Apple’s supply chain mustered to support a successful launch introduction of 3G iPhone?  Provide your comments by clicking on Comments.

Bob Ferrari