As Steve Jobs walks away from his CEO position at Apple, the financial and technology world has been speculating about Apple’s future. Steve Jobs is largely credited with supplying the magic that made Apple products so successful.  He brought an alien vocabulary to the consumer electronics business when he spoke of people wanting poetry in the objects they use. He built Apple’s brand based on the premise that not only would people pay for that poetry they’d pay a premium for it. He told people to Think Different and they did.  His charismatic leadership is legendary. Apple’s biggest challenge is going to be keeping the magic and the poetry flowing without Steve’s prescient intuition for what people wanted (or rather what they would want after he showed it to them).

Luckily for Apple, Cupertino is no Camelot. It’s a real company with some very real profits and the flip side of magic and poetry is pure, hard, business strategy.  Having one of the best supply chains in the world has played a tremendous role in Apple’s success.  It’s no coincidence that Apple has named Tim Cook, former Apple COO, to replace Jobs as CEO.  Tim Cook has been responsible for end-to-end management of Apple’s supply chain. Putting their supply chain guru in the top spot reflects a growing recognition of the importance of supply chain management and procurement to the overall business strategy.

Apple has ranked #1 for four years running in Gartner’s Supply Chain Top 25.  In the 2011 list, published in June of this year, Gartner identified four key themes that were emerging in 2011:
1. How companies deal with volatility
2. Their approach to value chain network integration
3. Their focus on sustainable execution
4. Their ability to orchestrate movement up the demand-driven maturity curve

According to a CNN article by David Goldman titled: How Apple blocks its Competition, Apple’s supply chain benefits from having streamlined components and a consolidated supply base. According to Goldman, “Apple predominately sells just five different gadgets— iPad, iPhone, iPod, Mac and Apple TV — and a combined total of 15 different variations of those devices, excluding modifications like the amount of available memory. That small handful of products shares many parts common to all the devices”.  It shouldn’t be amazing to me that one of the most profitable companies in the world benefits from such a basic sourcing practice. A practice that all companies should follow no matter how big or small they are. Steve Jobs was always a big proponent of simple solutions.

I want to be careful not to paint supply chain management as simple. You won’t revolutionize procurement by implementing a few common best practices. Tim Cook came to Apple with deep procurement knowledge. He came from Compaq where, as  Vice President of Corporate Materials, he was responsible for procuring and managing all of Compaq’s product inventory. Procurement is complicated and many facets are unique for individual companies, their products and their suppliers.

The reason I decided to write this blog about Steve Jobs, Tim Cook and Apple Is that I found something. Something different.  At the end of The Gartner Supply Chain Top 25 for 2011 article, huddled into a bullet list of recommendations for improving your supply chain, I think I found one with some Steve Jobs sparkle to it. The list of recommendations are general, culled from overall information collected from companies in the study but there was this one that stood out from the crowd and sounded so much like Apple talk that I think it must have been drawn from Apple’s supply management philosophy:  “Measure your supply chain as your customers experience it. Develop the capability to internalize customer needs, and proactively build customer feedback into your supply chain design.”   Tying your customer’s pleasure directly to the performance of individual suppliers is definitely a different  kind of metric. Some might say it’s an impossible metric but, if you can figure out how to do it, you might get some magic and poetry out of your procurement strategy.