When you think of supply chain excellence, which companies leap to mind as leaders? PR Newswire reports that according to a global poll of over 1,000 executives, Amazon is more admired than Apple for supply chain excellence—including across all major supply chain attributes other than innovation.
SCM World conducted a poll of 1,136 executives, and 58 percent said they admired Amazon most overall for the way it operates its supply chain, compared with 37 percent who picked Apple. Five percent of the respondents picked neither company. Those results, by the way, are a reversal of Gartner’s Supply Chain Top 25 for 2012, which placed Apple first and Amazon second. However, that ranking was based on the votes of 173 practitioners and with half of the
total score determined by companies’ financial performance.
Apple is a force to be reckoned with, to be sure. Look no further than the lines of people snaking around Apple stores overnight waiting for stores to begin sales of eagerly anticipated devices, and it’s easy to see Apple’s following.
Interestingly, in a show of supply chain strength, Japan’s earthquake, tsunami, and aftershocks last year halted or slowed production of hundreds of components that are found in consumer electronics devices, including Apple’s iPhone and iPad. Memory chips, touch screens, image sensors, batteries, and the special resins used to hold chipsets together were all in scarce supply. Nevertheless, Apple suffered no real setbacks, which can’t be said of its competitors.
That’s because Apple’s products are hot, the company had more than $60 billion in cash, and it’s a big company, explained Brian White, supply chain and Apple analyst at Ticonderoga Securities, at the time. Those three factors allow it to get more of its fair share of components, and, ultimately, market share, he said.
So, for example, Apple was able to aggressively use its size and vast array of resources—including its very deep pockets—to get the deals it needed from component makers. The company sent executives to its Japanese suppliers literally with cash in-hand to make sure supply remained adequate, White said.
But that was last year. This year, Amazon emerged to become locked in a high-profile battle with Apple in the market for tablet devices and the digital content—music, movies, apps, and books—consumed on them. The companies’ rival products, the Kindle Fire and iPad, are among the most sought-after gifts this holiday season.
Tellingly, in SCM’s survey, Amazon came out on top in three of the four supply chain attributes that survey participants were asked to rate the two companies on: agility, collaboration, and execution. Regarding agility (defined as the ability to quickly and cost-effectively shift amounts and/or types of production and delivery to improve operational performance in volatile conditions), 62 percent of the survey participants named Amazon as the leader, compared with 33 percent who named Apple.
Furthermore, regarding collaboration (defined as the ability to work across organizational boundaries to solve systemic operational problems and create new value for both customers and partners), 59 percent of the survey participants named Amazon as leader, compared with 31 percent of the respondents who cited Apple. For execution (the consistent and reliable delivery against commitments and within budgeted expenses), 57 percent of the respondents named Amazon while 38 percent cited Apple.
The last characteristic of supply chain excellence, innovation, was—of course—a different story. In this case, as would logically be expected, Apple won hands down on the fourth key characteristic of supply chain excellence: innovation. In this case, 78 percent of the survey respondents named Apple as the supply chain leader.
What I’d like to know, is whether or not you agree with the results of the survey. For that matter, do you think agility, collaboration, execution, and innovation are the cornerstones of supply chain excellence?