Getting the Supply Chain Right for a HOT Product
Aug 6, 2007
How many iPhones did apple sell in the first weekend? Around 700,000? (A Brief Detour on the confusion about this number between AT&T and Apple). Whatever the number is, it's some huge number which needs a robust supply chain to deliver!Why in the earth am I picking on this topic suddenly?....Well, this morning, I was reading an academic paper by Narasimha B Kamath and Rahul Roy of Indian Institute of Management, Calcutta on "Capacity Augmentation of a Supply Chain for a short lifecycle product". The authors took a system dynamics framework to drive their point home but to put it simply, the key highlights of the paper was to derive a framework based on which a company decides on the investment in capacity for an innovative product characterized by short product lifecycle and high demand uncertainty. If it is not done properly, either the product will not diffuse the way it was destined to or the manufacturer will be left with unused capacity.
While I was reading the paper, I got interested to understand the way Apple managed their Supply Chain for possibly the most hyped up launches in the history of personal communication device. New York Times reported (Link - Need Free Registration) that people lost money who bet on the fact that iPhones would go out of stock and they would get a chance to resell their phones at a premium. That’s why the iPhone is also a triumph of supply chain management, according to Michael Levi, director of solutions strategy, for i2 Technologies.
With Vertical integration making lesser sense with each passing day, controlling the entire supply chain is becoming increasingly difficult and there is a greater need to collaborate with your suppliers and partners. Imagine an iPhone! How many suppliers would be delivering the parts which go into an iPhone! I don't know the exact number but I would bet it'd be more than 100!
Modern Materials Handling prescribes three steps to make the supply chain work (Link)
- Establish synchronization: Power of having a single source of information with seamless sharing of information with your suppliers and partners
- Execute as efficiently as possible: Striking a balancing between going out as fast as possible to catch your competitors by surprise and soon followed by operational efficiency to survive in the days when the margins erode.
- Use the supply chain to address problems: Remember the screen cracking issue with Nano? But more importantly, do you remember the way Apple handled the issue by using the very same supply chain which is used to deliver the product?
So, you know how to strike gold when you have a Hot Product in your armor! It's not just the product but the way you plan the delivery is also very important! Did I hear Supply Chain is so out of fashion? Just that people don't notice!!
0 comments:
Subscribe to:
Post Comments (Atom)
