As with any industry that produces and/or moves products, tech companies all have their supply chains. In fact, some of the most well-oiled supply chain machines belong to high-tech companies. Two leaders - Amazon and Apple - recognize the need for innovative supply chain management, bringing together internal and external activities under a single vision leading to faster movement and better customer service, and reduced costs for themselves and the customer. The Amazon and Apple examples are a little different, as Amazon has a much larger retail/ecommerce component - and built a whole logistics infrastructure to support it - while Apple is more focused on its own products, but there is overlap in both directions. And regardless of their differences, Gartner designates these companies - along with a few others - masters of supply chain activities due to their sustained excellence in this area.
What Is Amazon's Supply Chain?
Amazon founder Jeff Bezos summed up the company's supply chain philosophy a few years back by comparing it to a flywheel. Bezos explained that while a flywheel at a standstill requires a lot of effort to begin spinning, once it gets going it develops its own forward momentum - making it increasingly easier to spin and accelerate faster each subsequent time around. In Amazon's case, that means more efficiencies passed on to the customer. Now for the nuts and bolts of the Amazon supply chain. Amazon breaks up its products into two main categories, fulfilled by merchant (FBM) in which the merchant takes care of the shipping and processing, and fulfilled by Amazon (FBA), in which Amazon does all the heavy lifting.
The Amazon supply chain is based around having buildings across the country, including fulfillment centers, sortation centers, receiving centers, specialty multi-purpose buildings used seasonally, and delivery stations. In FBA scenarios, Amazon stocks fulfillment centers with products, when purchases are made, they're packaged, then they go via semi-truck or air cargo to the delivery station nearest the customer. In some cases, that extra step isn't necessary as some facilities double up with stock and delivery abilities. From there, the packages are loaded into an Amazon delivery vehicle - many of which are contracted - to be delivered. This can take less than a day for some products.
What Is Apple's Supply Chain?
When it comes to Apple, they're widely recognized as a supply chain leader. In essence, the Apple supply chain is simple, consisting of various suppliers from whom they purchase components and materials which go on to the assembly plant in China. Then, for those who ordered from Apple's online store, products are shipped directly from there via traditional delivery methods. Otherwise, Apple keeps a distribution center full of product in California to go to its own brick and mortar stores and other retailers. It's long been considered a well-oiled machine, due to inventory management that avoids having too much product sitting in warehouses or on shelves. But even Apple has suffered from the recent supply chain issues plaguing others, like semiconductor chip shortages and COVID-19.
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Learn more about freight & logistics in our Learning Center. And here are a few example articles that relate to tech in their own right:
- Managed Transportation Services Overview
- 2022 Best Transportation Management System (TMS) Software
- SaaS TMS vs. Cloud TMS
