As Apple Inc. (Nasdaq: AAPL) holds its 23rd annual WorldWide Developers Conference this week, the iFaithful may be watching for signs of change under CEO Tim Cook. While I haven't seen or heard any big surprises from WWDC so far (although the week is young), even before the big event some observers were already noting subtle but important differences since Cook took over the CEO role in August 2011.
It seems inevitable that Apple will change under Cook's leadership. Indeed, he has said publicly that Jobs did not want the company always wondering, "What would Steve do?" Rather, he says, Jobs told him, "Just do what's right."
But Cook is a supply chain guy. (He served as Apple's chief operating officer, managing Apple's worldwide supply chain, since 2005. Before that, he was vice president of materials for Compaq.) His idea of "what's right" is bound to be different than that of Jobs, who was a design guy.
In a recent article in Fortune, "How Tim Cook is changing Apple," Adam Lashinsky points to several signs that supply chain issues have moved up in importance. "Tim Cook's stewardship of Apple is beginning to come into focus," he writes. While Cook is maintaining much of Apple's culture, "shifts of behavior and tone are absolutely apparent." Among them:
Cook has tackled public criticism regarding working conditions and possible environmental problems at Chinese suppliers. Rather than trying to dismiss them, as Jobs did, Cook is working to address the problems. He personally visited the Foxconn Electronics Inc. factory. And Apple has finally joined the Fair Labor Association, which monitors the factories.
Cook appears to be beefing up Apple's supply chain dramatically, perhaps in preparation for an Apple TV. The company has disclosed the value of its Chinese assets ($2.6 billion), and Lashinsky speculates that most of that is material and equipment Apple bought for its contract manufacturers. The company is "financing massive upgrades in its manufacturing capabilities in Asia," he writes. The article quotes David Eiswert, a portfolio manager at T. Rowe Price, noting Apple's deep pockets and manufacturing prowess. "The Apple supply chain is doing things no one else can," says Eiswert.
Cook is making sure supply chain management is involved at the highest levels of corporate strategy. The article quotes a former Apple engineering vice president. "I've been told that any meeting of significance is now always populated by project management and global-supply management... When I was there, engineering decided what we wanted, and it was the job of product management and supply management to go get it. It shows a shift in priority."
Meanwhile, one of Apple's chief competitors -- Google -- may be getting supply-chain religion. A recent article in Business Insider notes that Google recently hired Mark Randall, a supply chain expert who developed and managed procurement for the Amazon Kindle and Kindle Fire. As Google moves into building hardware, such as phones, its supply chain will be critical to its strategy.
According to your post, I agree with the fact one of the company's key point has been the creativity, especially from the former CTO. But the point is, how a big company as Apple could still hold its position in the market? Supply chain is important, but maybe is a block at the end of chain, people are more attracted by creativity.
@Ariella: That sounds like a classic complaint from engineering, actually. The wall between "we design it; you buy it" and a more integrated appraoch -- where purchasing and engineering actually confer -- is still pretty solid. But now that considerations such as environmental compliance have to be designed into a product, engineering and purchasing really need to cooperate. Maybe Apple isn't as advanced as everyone thinks it is--as least as far as this issue is concerned :-)
The article quotes a former Apple engineering vice president. "I've been told that any meeting of significance is now always populated by project management and global-supply management... When I was there, engineering decided what we wanted, and it was the job of product management and supply management to go get it. It shows a shift in priority."
I can understand why supply chain is so important for a company the size of Apple but I hope Cook's thrust does not detract from the creativity in Apple products. Remember that is what made the company.
" He personally visited the Foxconn Electronics Inc. factory. And Apple has finally joined the Fair Labor Association, which monitors the factories." OnlyforthatreasonIthinkhedidalreadyalot.ItwassomethingthatAppledidn'thave;a"humanface"andCookseemthathecaresaboutit.
Of particular interest is the third bullet, which mentions supply chain management is involved in high-level Apple meetings. The biggest risk there, as always, is the disclosure and leak of Apple's design and/or strategy. I believe the company has already survived this once or twice, though. If suppliers value Apple's business--and it would be silly not to--there will be no loose lips. It can only benefit suppliers, and Apple, to have a close relationship. Having an inside track on product development roadmaps works for both parties.
Qualcomm has launched a big push to spread its cellular technology, and thus increase its royalty income, not to mention chip sales, beyond mobile phones.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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