As we would expect, Costco’s inventory days are lower than the Industry average. Considering that Debtor Days are 3 times lower than industry average, Costco operates with extreme efficiency, an efficiency hon which its entire structure and functioning rely. The scale and characteristics of Costco’s warehouses and bulk-selling format, feed a machine that produces high sales volumes and operates on rapid inventory turnover,
Apple's entire supply chain has been rated as the top supply chain in the world by Gartner's (Wailgum, 2011). Apple was one of the top companies rated in the resilience category by overcoming such hurdles as the Japanese earthquake without any major disruptions. Other categories that the supply chains were critiqued under included speed, agility, efficiency, responsiveness, and innovation. Apple's entire production operation is outsourced to the Asian Pacific and the company manufactures their goods through strategic partners who are some of the best electronics manufactures in the world.
Globalization has also had a significant impact on Apple's supply chain. The company earns high profits because it is able to produce its products at a low price and then sell them at a high price (Chakrabotty, 2012). In addition, the company has noted that it assembles its products in China because all of the components are made there this in addition to the low cost of assembly labor. Apple facilitates this by working with logistics suppliers like FedEx who can quickly move finished goods around the world via a number of hubs. All of Apple's products, for example, arrived in the United States in Oakland, California and from there make their way to the customer.
Inventory levels over the past 4 years have remained on an increasingly consistent track as their revenue has risen. According to Best Buy (2010), this rise in revenue and assets is partly due to the fact that they enter new markets and open new stores across the world. The latest opportunities that they have come across include new stores in Europe and other areas overseas. This is new territory for Best Buy but has been a successful venture based on their flexibility with their inventory systems that they have in place. The following table presents the last five year financial highlights according to the Financial Statements and Supplementary Data of Annual Report on Form 10-K. (Investor Relations, 2010) Five-Year Financial Highlights
During the game, I realized that wide gaps in orders of every role in the supply chain such as factory, distributor and retailer create inventory management challenges. For example, distributor records 0units between week1-week 4 compared to retailer within the same period. The retailer records 3units, 5units, 2units and 2units between weeks 1- week 4. The same applies to factory with 0units from weeks 2-4. Addressing inventory management problems requires developing an average unit level to avoid disappointing customers when demand
Dell uses a just in time order fulfillment policy and accurate forecasting of sales to minimize inventories. This allowed Dell to hold inventory of finished products far below levels of their competitors (10-20% compared to 50-70% industry level) and furthermore allowed them to quickly implement changes to their product lines as new technologies became available. This quick inventory turnover also allowed Dell to retain more capital. Finally, this policy enabled Dell to respond immediately to technological progress in components and deliver state of the art new finished products (e.g. Pc’s holding the newest Pentium microprocessors) while competitors
Just South of California's capital city of Sacramento, one will find a thriving community in the heart of beautiful Sacramento County. Just minutes outside of Sacramento, is a small city that maintains its charming small-town appeal, all the while offering its residents big city amenities.
Apple Inc. is one of the largest technology companies in the world. The company develops consumer electronic gadgets such as smartphones, computers, desktops, laptops, iPods and tablets. The company was formed in 1976 by Steve Jobs with an intention of making computers but later it changed its focus to include the manufacturing of consumer electronics. However, the company was dealt a big blow when its chief executive officer and founder Steve Jobs died. The company will therefore have to search for ways in which it will maintain its market dominance as well as capture new and emerging markets. This research therefore seeks to establish how Apple forecasts demand and manages its inventory (Apple Computer Inc., 2006).
Employing new merchandising tools aid the company in realizing lean production measures with its supply chain. Forecasting capabilities substantiated through “The combined efforts of our supply chain, merchandising, operations and finance teams, we reduced inventory by almost half a billion dollars in 2009, while at the same time improving our in-stock position” (Datamonitor 360, 2010).
A company must pay attention to the number of days of its sales it holds in inventory to determine the amount of time it will take to convert the inventory on hand into sales (Gibson, 2011). As shown in Exhibit 3, 3M increased from 81.74 days of sales in inventory in 2007 to 82.20 days in 2008. At face value, an increase suggests a slight negative trend for 3M as it is holding onto more inventory, taking longer to sell
Retail super-giant Wal-Mart has fought its way to becoming the world's largest company. Wal-Mart’s legendary supply chain technology has allowed them to break the three-day barrier that some economists in the eighties felt that it was unbreakable. In other words, Wal-Mart is often able to replenish items on the Wal-Mart shelf in less than three days – not from the central warehouse to the shelf, but from the manufacturer to the shelf. With quick and reliable 2-day turn around, Wal-Mart is able to maintain lower levels of inventory and still meet customer demand. These lower inventory levels result in either a reduced floor plan with lower carrying costs and lower interest expense – or a greater diversity of products on the store shelves.
Apple’s renowned for their brilliant abiltity to cope with changes in market demand. They strictly control every aspect of the supply chain to ensure that both the distribution and supply-and-demand relationship are near perfect. They use a Make-To-Stock method of Supply Chain Management that allows customers to walk into any Apple Store and make a purchase the same day, which is coupled with an extremely low inventory level that means the system has nearly Make-To-Order characteristics. Apple uses SAP (Systems, Applications & Products in Data Processing), a German Enterprise Resource Planning software, to power the global supply chain and implement a strategy to “purchase raw material and reserve manufacturing capacity ahead of time “  in order to make this possible.
This report provides the analysis and examples of inventory management system and forecasting methods of Walmart. Methods of analysis and evaluation include Walmart strategic vendor partnerships, fewer links in supply chain, cross docking, and technology. Results of methods mentioned show Walmart accruing a high inventory turnover ratio of 8.1 (Bloomberg). In comparison to other retailer on regional and global scale Walmart hits industry highs with 71.9% in market share
In the commercial environment Apple are known not only for their innovative products: they are also known for their highly effective inventory control. The system utilized by the firm means that at any point in time there is a minimal amount of capital tied up in the inventory, holding only sufficient inventory to support sales for five days. The ability of the firm, to operate consistently in this manner without suffering significant 'stockouts', especially when the demand for the products does not remain the same through the year, is a credit to the organization and ability to adapt to the demand, indicating a strong understanding of the way inventory needs vary. To appreciate the way this may occur it is possible to look at the firm and examine the way inventory is used, assessing the level of seasonality and looking at the stock management in this context.
Apple’s supply chain management process is one of the most popular and interesting process. Apple’s continuous strive to be a leading edge technological company in the market gives them the upper-hand to its suppliers. An article written by Eva Dou and Lorraine Luk on WSJ Digits on November 20, 2014 explains the power Apple has on its suppliers and some detrimental effects the power has left on the supplier. At Apple, they have a strict process on how they release a product and the advertisements that are put out in order to get stakeholders attention. Each step is crucial to Apple’s continuous success, these steps consist of; research and development, concept testing, pre-launch, official launch, and the quarterly review. As for Apple’s supply chain management, the logistics, and all the production processes is what has kept Apple at the top of the technological market.