We have often commented many times about the enviable position that Apple provides in its supply chain capabilities, especially in a more challenged market with altered patterns of consumer-related needs.

Apple reported yet another blowout quarter of sales and profits and we all have to tip our hats.  The company’s latest quarterly results (June fiscal Q3) reported $8.34 billion in revenue and a net quarterly profit of $1.23 billion.  Apple remains in a somewhat enviable position for this economy, in that demand for most of its products continues to exceed available supply, which adds to consumer hype of needing to have that iPhone.

Beyond the quarterly financials is yet another incredible demonstration of supply chain fulfillment capability.  Apple’s press release notes the following unit volumes for the quarter:

  • 2.6 million MacIntosh computers shipped, a 4 percent unit increase over last year’s quarter
  • 10.2 million iPods, a 7 percent unit decline over last year’s quarter
  • 5.2 million iPhones, a 626 percent growth over last year’s quarter, and obviously the soon to be new volume leader in the Apple collection of products.

These combined unit shipments equate to a total of 10.0 million total units sold, reflecting an average of 277,000 units of daily sales output. Every day, Apple has been selling over a quarter million end-item products, and the company’s value-chain processes continue to consistently rise to the challenge.

Whether by design or shortage, Apple reduced its overall inventory levels by $125 million over the nine months from September to June. The company had an average of 39 inventory turns, and by my calculation, just less than 7 days of inventory sales outstanding.  That is a true reflection of running a lean and continuous replenishment of supply. In other words, if you visit your local Apple store or retailer, and you don’t find what you want, chances are good that you might find it again in a week.

But the fact that new models of the 3GS iPhone were only released in early June, and sustained these levels of sales does trigger curiosity as to whether Apple can continue to stay ahead of demand. In a previous post, I commented on Apple’s supply chain efforts to be able to support the recent weekend launch that yielded over one million 3GS iPhone units sold.   And as noted in a recent Computerworld article, Apple has launched an inventory tracker tool to assist consumers in finding out which store has available inventory for sale.

It’s no wonder that Apple remains on the top of nearly everyone’s benchmark list of best in class for supply chain capability. Sadly, Apple refuses to boast or allow disclosure of the specifics related to their supply chain business processes,  Can we really blame them?

Bob Ferrari