While everyone has been wondering about the fate of Apple Inc. (Nasdaq: AAPL) and how it will continue its fast-paced growth, given the recent double-shot headline news about its CEO and its December-quarter results, I’ve got to say I’m feeling congratulatory -- and even a bit smug. (See: Apple's Jobs to take Medical Leave of Absence and Apple Posts Q1.)
I know many of you may already realize this, but I want to make sure we fully appreciate this important milestone: Timothy Cook, Apple's COO who will be heading up the company during Steve Jobs's medical leave of absence, is probably the first supply chain guy to lead one of the most successful tech companies in modern times. Shall I say it another way? The professional supply chain glass ceiling is disappearing, and it’s about time.
Those of us at EBN have long advocated the role supply chain and procurement professionals should play at the highest echelons of corporate governance. Their valuable supply-demand insight, creative problem-solving skills, financial business acumen, and responsibility for millions -- or billions, in many cases -- of dollars of critical materials and inventory should come with a C-level title. For the most part, we’ve seen this evolution occur. In the last decade, procurement, supply chain, and operational leaders have moved from low-ranking paper pushers, to senior vice presidents, chief procurement officers, and chief operating officers.
Now, with Cook essentially running all of Apple’s day-to-day operations, we could speculate that one day soon even more C-suite opportunities will open up for the whole profession. As widely reported in mainstream media and analysts’ commentary, scuttlebutt about Apple’s succession plans in light of Jobs's most recent medical leave seems to point to Cook as a logical choice for the top CEO slot. Yes, this may be some time coming as Jobs will continue to drive the company’s strategic direction, and there’s no definitive word on how long he will be on leave. But I’d put my money on Cook. Just look at his track record.
As Apple’s chief operating officer, a position he’s held since 2005, Cook (click here for his bio) oversees worldwide sales and operations, including end-to-end management of Apple’s supply chain, sales activities, and service and support in all markets and countries. He heads up the Macintosh division and helps develop strategic reseller and supplier relationships.
Previously, he was vice president of corporate materials for Compaq (remember them?), before the merger with Hewlett-Packard Co. (NYSE: HPQ), and was responsible for procuring and managing Compaq’s entire product inventory. He also was chief operating officer of Intelligent Electronics’ reseller division and put in 12 years at IBM Corp. (NYSE: IBM), most recently as director of North American fulfillment where he led manufacturing and distribution functions for IBM’s Personal Computer business in North and Latin America.
Let us not forget that he has been in charge of Apple twice before when Jobs took leaves of absence for health reasons. And his leadership certainly did not disappoint Wall Street. According to Associated Press reports picked up by various media outlets, Cook’s last tenure, which ran from mid-January to the end of June 2009, brought the release of a new iPhone version, updated laptops delivered on schedule, and news that the iTunes app store hit 1 billion downloads in its nine-month existence. The AP reports that Apple's stock rose 62 percent during those six months.
Despite Apple’s remarkable quarterly revenue and profit gains, Cook and other executives on the recent earnings call with analysts acknowledged that there were supply issues to iron out, particularly with its iPhone4. The faster-than-expected inroads the company made in new markets and geographies and with new carriers and partners made it difficult to keep supply, demand, and production in sync, according to most accounts.
“Relative to iPhone 4, I also feel very, very good [with] what we've been able to do. However, it's not enough,” Cook said. “We do still have a significant backlog. We are working around-the-clock to build more. I feel great that the demand is so high, but at this point, I'm not going to predict when supply and demand will meet. We believe the reaction and results from the Verizon Wireless customers will be huge, and so I don't want to give a prediction right now when the supply and demand will crawl.”
(I had problems accessing the call replay on Apple's site, but I found the transcript here.)
The supply issues did grab some attention in the news and among analysts, but didn’t really dampen the rosy outlook for Apple. We’ll see how Cook and Apple’s supply chain partners solve this pickle in the next few quarters. Given his experience, I bet he’ll come up with something. Any thoughts?