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05-31-2012, 10:15 PM #1
Apple Turns Over Entire Inventory Every Five Days
Sometimes statistics concerning Apple’s monumental supply chain are baffling, take this little gem for example: Apple turns over its entire inventory once every five days.
In Gartner’s annual Supply Chain Top 25, Apple again ranked atop the list with an industry leading 20.2 percent return on assets over the last three years, and three-year revenue growth of 51.5 percent. However, the turning over of Apple’s entire inventory once every five days is basically unheard of, especially for a consumer electronics manufacturer.
Gartner compiles the Top 25 list by creating a composite score that takes into account voter opinions, Gartner analyst opinions, and three-year weighted return on assets awarding these three metrics 25% of the total composite score. Inventory returns and three-year weighted revenue growth account for the remaining 15 percent and 10 percent of the composite score.
Gartner calculated Apple’s turnover period by dividing the days in one year with the inventory turnover ratio, which for Apple equaled 74.1, or once every five days. McDonald's was the only company to best Apple with an incredible inventory turnover speed of 2.5 days. That’s a lot of food, going down a lot of eat holes.
Amazon placed second, McDonalds third, with Dell and P&G rounding out the top five. Dell and Samsung were second and third to Apple in terms of turnovers in the electronics category with turnover times of 10 and 21 days.
Don’t expect Apple’s place to waver much on this list during Tim Cook’s time as CEO.
Source: Apple Insider
05-31-2012, 10:52 PM #2
This find only tells me one thing: Apple is just smarter about producing its products. To me, this means nothing sales wise. Inventory turnover doesn't mean more or less are sold, just that the anticipated amount was sold with enough stock left for supply spikes.
What's impressive to me is that a company with so many product rumors is able to calculate its inventory so accurately.
Last edited by justibackwardsn; 05-31-2012 at 10:56 PM.
06-01-2012, 03:42 AM #3
This doesn't mean that Apple sell more products than a compeititor on the list, it just illustrates that they have a better product management systen and an efficient level of stock control which means they don't have to store inventories for as long. However, it doesn't state how much it costs for the handling and manipulation of it's products in order for them to be resupplied every five days. This doesn't provide any evidence of efficiency.