Supply Chain News

The Logistics Behind Transporting Millions of iPhones from China to Stores Worldwide

Apple’s latest product launch places supply chain with enormous challenges.

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Apple announced that its fleet of next-gen iPhones will hit store shelves on September 20.

For most people, this means that they simply have to lace up their shoes and head on over to their local Apple retail store pick one up.

For Apple, it means that they have nine days to ensure that millions of iPhones emanating from China will ready for purchase at storefronts worldwide.

It’s a logistical exercise on the grandest of scales, especially considering that Apple routinely sells millions of new devices during launch weekend.

Bloomberg published a fascinating article detailing the innumerable procedures that make up this incredibly complex operation that, when all goes according to plan, stays hidden from public view.

The process starts in China, where pallets of iPhones are moved from factories in unmarked containers accompanied by a security detail. The containers are then loaded onto trucks and shipped via pre-bought airfreight space, including on old Russian military transports. The journey ends in stores where the world’s biggest technology company makes constant adjustments based on demand, said people who have worked on Apple’s logistics and asked not to be identified because the process is secret.

The report relays that many of Apple’s current practices were “built up” under the watchful eye of Tim Cook who for many years served as Apple’s COO and dutifully implemented measures to make Apple the smooth and efficient machine it is today.

As for shipping iPhones worldwide, Apple actually begins that process before they are unveiled to the public, moving large shipments of iPhones to distribution centers around the world. Naturally, these shipments are steadily monitored by security guards at all times, “from truck depots, airports, customs and storage warehouses until the product is finally unveiled.”

While shipping finished products across the globe is one thing, there’s another aspect to the logistics machine that isn’t often discussed, namely getting all of a device’s components together so that the assembly process can begin.

The logistics for a new gadget start months before it is unveiled, said the people with knowledge of the process. Apple first coordinates flights and trucks to move components from suppliers to assembly plants in China. Teams from sales, marketing, operations and finance collaborate to forecast how many devices the company expects to sell, said the people.

When it comes to shipping iPhones to the US, Bloomberg reports that Apple employs FedEx to carry its precious cargo from China to Memphis, Tenn., where the company is headquartered. As a point of interest, the Boeing 777s FedEx uses cost “about US$242,000 to charter” and can accommodate 450,000 iPhones.

The entire article is worth reading as it provides some fascinating insights into the grandiose, and yet silent, mechanisms that enable Apple to operate so efficiently.

Whether it’s tweaking internal forecasts regarding how many iPhones need to be produced or adjusting the allocation of handsets based on regional fluctuations in demand, Apple stays atop of even the most minute details to keep things running smoothly.

Read the article by H. Donald Ratliff, Ph.D.: 10 Rules for Supply Chain & Logistics Optimization

Article Topics
Best Practices   Supply Chain   Inventory Management   Business   Other   Professional Services   Apple   Outsourcing   All topics


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