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How Your Supply Chain Issues Can Break Your Company
It doesn’t matter how innovative, interesting, or important your products are: If your business doesn’t have a handle on logistics and supply chain management, you’re in trouble.
That’s because a company that doesn’t have a strong behind-the-scenes management game doesn’t have a product to sell. Without that, there essentially is no company.
In recent years, one company in particular appears to be learning that lesson over and over, and it’s a surprising one: Apple, the tech giant that brought us the iPhone, among other world-changing products.
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In all likelihood, Apple will be fine. Their products, when they do launch, are snatched off the shelves at astounding rates, despite the equally astounding prices. There may not be a company that is as culturally relevant and ubiquitous as Apple, which serves them well even when they make mistakes.
But make mistakes they have, and as far as many people can tell, those mistakes are the results of poor supply chain management.
A Recent History of Delays
In the summer of 2017, Apple announced the HomePod, their answer to Amazon’s Echo and Google’s Home. The smart speaker category is exploding, especially on the lower end—an area that Apple won’t be exploring, since they don’t exactly make cheap devices. They are looking to enter that market on the high side, and they’re doing just fine in that niche.
The best time to launch such a product would have been during the holiday season. The sooner the better, really, since plenty of companies had already established a foothold in smart speakers, but there’s a reason that Apple originally slated the HomePod for a holiday ‘17 release.
And yet, Apple
had to delay the HomePod, without offering a comment as to why.
That’s not the only Apple product to miss its due date. The AirPods, iPhone X, and applications like Apple Pay Cash all launched later than expected or have yet to be released.
Don’t let anyone tell you otherwise: It’s not good to announce a release date for a product and then push back that date. Customers get restless and move on to a competitor, or lose interest, or begin to lose faith in your brand generally.
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Again, because this is Apple, of all companies, these delays are
probably fine. It’s hard to imagine that enough Apple fanboys and girls will jump ship en masse to make a serious dent in the company’s bottom line or stock price.
But that doesn’t mean Apple has carte blanche to do whatever they’d like. They are seeing serious blowback from media outlets and customers that they wouldn’t have had to deal with had they delivered on their promises.
How These Issues Affect Your Brand
A major part of a company’s success is contingent upon being a reliable source for a product or service. If you don’t supply one of those two things, you’re not really in business.
While Apple is seemingly invincible, missing the due date on the HomePod opened them up to some serious questioning from the blogosphere.
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Here’s
an excerpt from ZDNet on Apple’s delivery woes:
As much as I don't want to bring up the tired old "Apple wouldn't have done this under Steve Jobs' watch" trope, a lot of what's happening at Apple lately is different from what the came to expect under Jobs. … {P]roduct announcements and launches felt a lot tighter for sure, as did the overall quality of what Apple was releasing.
With each passing year Apple slips further towards being "just another tech company."
And
this analysis from InvestorPlace speaks to the uncertainty that Apple is sowing by failing to stay on track:
But when looking over the next few years, things could easily change, and for the worse. Basically, Cook needs to refocus on his strengths and make sure that AAPL gets back to a rock-solid approach to production.
These reactions speak to the fact that while Apple is about as invincible as a company can be, that status may only be temporary. A continued lack of dedication to the supply chain side of things could change Apple’s fortune in the coming years.
Why The Supply Chain Is To Blame
Because Apple didn’t comment on the reason for the HomePod delay, it’s mere speculation that supply chain issues caused the holdup. Same goes for its other delayed products.
Also, there’s a certain irony in the fact that Apple CEO Tim Cook, mentioned above, is something of a supply chain guru. Apple’s secret to success over the years, according to some, isn’t just their innovative designs, but
how much they commit towards manufacturing.
So why are we blaming supply chain mismanagement for delays here?
One, the fact that Apple has pushed back a number of products is a sign that they may be promising too much, too quickly.
But it’s telling that when the
Wall Street Journal analyzed the reason for the AirPods delay, there was much discussion of how Apple was essentially charting a new course for earbuds. These challenges likely led to issues with manufacturing the product.
So while Apple is known for pouring money and time into their machines and equipment, they may be overestimating just how much those machines and pieces of equipment can actually do. That’s poor supply chain management in a nutshell.
It’s Not Just Apple
Other companies besides Apple have suffered major blows to their brand and even profits by failing to manage their supply chain properly.
Companies such as Wal-Mart, Target, Nike, and Ralph Lauren have all experienced near-disasters that were almost all due to some kind of supply chain mishap. Sometimes it was promising inventory to customers that wasn’t actually in stock; other times it was relying on “just-in-time” inventory that failed to be on-time at all.
Large companies have the reserves to take a major hit and recover over time, winning back customer trust with refunds, discounts, deals, and long-term marketing campaigns that help consumers forget past troubles. But if you’re a small or medium-sized business, it’s unlikely that such a hit will go without consequences. In addition, many small businesses are hardly keeping their
supply chains safe from hacks that can cost them dearly.
What’s The Solution Here?
Apple is obsessed with delivering perfect products to their customers. If they’re unsatisfied with how things are progressing, they’ll push back a delivery date rather than put out something not up to their high standards.
On one hand, that’s admirable. Some would say it’s better to be late with a great product, then on-time with one that experiences bugs and mechanical failures.
On the other, coming to the table late, product after product, is a good way to, as ZDNet put it, become just another tech company. That’s something Apple will never settle for.
So Apple would be best served by examining their supply chain situation, and seeing what inefficiencies are bogging down their processes.
In fact, this is a great idea for all businesses. If you’re not sure why there are delivery delays, or manufacturing issues, or other problems that lead to customer complaints, then your supply chain
isn’t nearly transparent and effective enough for the 21st century.
