Supply Chain Matters has often reinforced the importance and ever more critical dependence among new product introduction, product management and supply chain execution processes in support of expected business outcomes. The notions of the tensions and needed alignment concerning design for supply chain manufacturability and advanced product innovation are ever more critical.

There is a classic reinforcement of such dependence in a published front page article in today’s edition of The Wall Street Journal. Teachers, instructors, and future leaders in supply chain management should definitely reference this report. Apple logo

We call addition to: Tim Cook Stumbles at His Specialty, Shipping Apple Products On-Time (Paid subscription required). The essence of this report comes in the opening paragraph. Apple CEO Tim Cook, who assumed his CEO role after a successful stint as the company’s senior supply chain and operations executive, was known for ensuring that new products were introduced to the market on-schedule.

This report observes:

With Mr. Cook as CEO, though, Apple’s new gadgets are consistently late, prompting questions among analysts and other close observers about whether the technology giant is losing some of its competitive edge.” 

This Editor was taken aback with the true significance of the above quote. Consider that Cook’s management stripes were garnered in supply chain management leadership successes which came in the era of Steve Jobs, a noted perfectionist in product design, even to the very last minute.

The report goes on to cite recent late to market product availability disappointments with products such as the AirPods, HomePods and other accessory products. The WSJ states that since Cook became CEO in 2011, three “major new products” missed publicly projected shipping dates. Specifically stated:

The delays have contributed to much longer waits between Apple announcing a product and shipping it: an average of 23 days for new and updated products over the past six years, compared with the 11-day average over the six years prior, according to a Wall Street Journal analysis of Apple public statements.”

Keep in-mind that the six years prior referenced was under the leadership of Steve Jobs who was notorious for driving product development and supply chain planning teams crazy with last-minute product functionality changes, with Apple’s contract manufacturer Foxconn still expected to perform with required production ramp-up milestones.

The report cites former Apple employees as observing this difference, namely that whereas Jobs was careful not to announce product availability until he was assured by the supply chain and product management that the product was ready, Mr. Cook tends to allow announcements of new products and shipping dates much earlier in the introduction process. Other cited areas included ongoing value-chain component development and sourcing strategy moves that have since occurred. Rather than previously sourcing complete components and subsystems such as an iPhone camera, Apple has shifted more toward sourcing of sub-components of the camera, requiring more product design and development coordination. Such sourcing moves were initiated to reduce product costs and boost margins.  That should be a familiar ring to many of our readers.

Astutely pointed out is how Apple’s competitors have been able to take advantage of these product availability delays. In the case of the delayed market availability of the HomePods speakers announced in June, Amazon was able to take significant advantage in the holiday period with the mass availability of its redesigned Echo speaker priced at $99.

While dinging CEO Cook on product on-time performance, praise is rendered for shepherding Apple’s overall profitability and share price performance of-late. Yet, we find that ironic given Cook’s supply chain and product management DNA. We all know and likely aware that Apple has a cult customer following and loyalty, but lately such loyalty seems to be strained with revelations of slowing performance of older iPhone due to battery performance issues, or continual snafu’s in iOS software updates.

Slightly mentioned in this report was the market availability delay of the new tenth anniversary edition iPhone X.  From our point of view, the 4-5-week incurred delay in product availability will be even more telling as to whether Apple has eroded in its new product development and introduction capabilities.

We, along with others, have all cited the Apple supply chain as being among the top five globally in overall capability. It would seem with every passing quarter, and with continued market forces for added innovation and global scale, the shine on the apple supply chain is perhaps more muted.

The takeaway is that even the best of supply chain organizations, continue to have strong dependencies on product design and management and on principles of design for supply chain. Autonomy in product design and management, at the expense of reliable supply chain execution has consequences with the supply and value-chain is global and complex. Utilize this report as a reference to such conflicting forces.

 

Bob Ferrari

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