Apple Case Study

Only available on StudyMode
  • Download(s) : 182
  • Published : August 2, 2012
Open Document
Text Preview
4.List three SCM metrics Apple should track, along with the reasons these metrics will add value to Apple’s business strategy. SCM metrics could include
* Back order
* Customer order promised cycle time
* Customer order actual cycle time
* Inventory replenishment cycle time
* Inventory turns

All of these metrics will add value to Apple by giving them insight into current production and order fulfillment issues.

1.INVENTORY TURN

In its eighth annual Supply Chain Top 25 (via Business Insider), Gartner analysts once again ranked Apple's supply chain as the best in the world. Apple stood out with a inventory turnover period of five days, calculated by dividing the 365 days in one year with the inventory turnover ratio or the cost of goods sold over quarterly average inventory, which in Apple's case is 74.1. Especially considering the economic turmoil the world is going through these days just makes Apple's high inventory turnover all the more impressive indeed.

A report from research firm Gartner says that Apple has an inventory turn metric of 74, which means that the iPad maker turns over its entire inventory once every five days, a staggering number for a consumer electronics company. These numbers may indicate that Apple is improving its operations and getting more efficient with how it allocates capital, generates sales and manages inventory. If the trend of a company’s inventory turnover is up, that means the company is keeping products on the shelves for a shorter amount of time. Companies with perishable, fashion, or high-tech products don’t want their inventory sitting on the shelf for too long because it can deteriorate or become obsolete quickly.

2.BACK ORDER

1. Customer order actual cycle time

This measure can be viewed on an Order or an Order Line level.The measure starts when the customers order is sent/received/entered. It is measured along its various steps of the order cycle. Through credit checks,...
tracking img