The New Technology Elite: How Great Companies Optimize Both Technology Consumption and Production

Chapter 2

The “Industrialization” of Technology

Kevin O’Marah lives and breathes logistics. A senior analyst at Gartner, the research firm, he has focused for years on the science and magic behind logistics. His team analyzes practices and challenges in a wide range of industries including aerospace, auto, consumer products, and life sciences.

Each year the supply chain team at Gartner publishes a list of companies they respect across industry lines. For the past four years (2008–2011), Apple has topped that list.¹

The Apple—Physical and Digital—Supply Chain Mastery

O’Marah says,

Apple's leadership has been pervasive. Traditional supply chain disciplines like managing an extended network of contract manufacturers and component suppliers are fully in force, but beyond these areas Apple has led in at least two vital ways. First is in its huge leverage of the digital supply chain. By fostering the development of a secondary market in applications for its iPhone, the company has shown again (as with iTunes) that consumer product revenue growth with zero inventory is not only possible, but repeatable. The other area in which Apple's supply chain leadership is increasingly important is in the retail experience. As one of a handful of deeply vertically integrated brands, Apple's retail chain achieves almost unimaginable success in its stores.

While Apple gets plenty of kudos for the elegance of its products, peel the onion, and, as we will show in various chapters, it has built a retail ...