The Fascinating Supply Chain Journey of Your iPhone Case

I live in Los Angeles – so viewing life through the prism of would-be TV show pitches is as natural as peering through the rain in Seattle. And as a Supply-Chain-Lifer, how can I not weave my chosen discipline into the portfolio of a Supply Chain based reality series I have ready to go, in case I run into Simon Cowell at that Coffee Bean & Tea Leaf on Sunset Boulevard and Laurel Canyon. Of all of these reality show ideas – So You Think You Can Cycle Count, Supply Chain’s Got Talent and The x(T)=.5FD(1-x)T+(K÷T) Factor – I think Simon will go for The Amazing Race To Get iPhone Cases To Market.

Pilot episode synopsis (inspired by actual events):

Against BLACK – BURN IN: “War Room”

Then – a cacophony of shouts – “Do the Mac forums have anything concrete?” “We still have four months of the current gloss black cases!” “How do we not know anyone who knows anyone at Foxconn?”

BURN IN: “Two weeks before launch…”

FADE IN:  A SUPPLY CHAIN TEAM at One of Apple’s (many) iPhone accessory suppliers. This isn’t their first rodeo…

…there’s an Apple news event, Tuesday, 10AM, Cupertino Mean Time…

…the Mac rumor sites have erupted in a frenzy of speculation, Photoshopped images and suspicious engineering drawings…

…there’s a good chance Apple’s about to announce its latest iPhone…

Once Apple’s press event goes live – only days away – our Supply Chain team will have weeks, maybe days, to get their first wave of iPhone cases to Apple Retail’s distribution centers. And…

…they have no engineering or design specs …

…they don’t know for sure that it will be a new iPhone…

…they know whoever gets cases to Apple Retail first will get the most pegs at Apple Stores worldwide…

…their competitors know this too…

All they can do is chug black coffee and secure raw materials (leather for cut-and-sew factories, powder for injection molding operations, etc.) and reserve production capacity at their LCM factories.

They book space on upcoming flights crossing the Pacific. Our Supply Chain team has been around long enough to remember that it took the first iPhone around six months to sell 1 million units. By the time the iPhone 3G launched, 1 million phones were sold in the first 6 weeks. This latest version will likely be more popular…Or not?

As our Supply Chain team commits very real dollars to lock up raw materials and capacity, the other very real possibility looms – this could be a supply chain red herring. Not every Apple press event leads to new iPhones. What if it’s a new OS? What if it’s a tweak to Apple TV? What if Tim Cook just wants to see if he can make the Internet collapse under its own weight?

If case sales plummet because our SC team decides to wait 48 hours… well, the folks replacing our SC team will know not to do that next time. Our team has to roll the dice.

Tuesday, 10AM, Cupertino Mean Time.

It’s official. Two new iPhones. But our SC team doesn’t have any specs or any idea what manufacturing tolerances will be. They can’t get their hands on prototypes. (No one outside Apple can.) And by the way, Apple’s confirmed that the iPhones will be available for pre-sale in 3 days and will be in consumers’ hands in 10 days.

…Go!…

Using press photos as their only guide, they greenlight production throughout southeast China. Factories – not just theirs – hum to life. The amazing race blasts into fifth gear.

Our SC team best-guesses the mix between the two new iPhones – because they’re not the same size. They crank up cut-and-sew and stretchable materials factories. Hard cases will wait 10 days, until the SC team can get the new iPhones and measure variances. Width, height, depth – all within fractions of millimeters – no way to get that off PR photos. Injection molded cases will be the second wave.

The key is to get the cut-and-sew and rubber cases onto those pegs and secure the merchandising space.

…3 days later…

Apple’s pre-sales begin. After 24 hours – 4 million new iPhones pre-sell. (Including dozens our SC team purchases – to spec them out.)

Apple’s purchase orders start crashing their suppliers’ servers. Our SC team hasn’t reserved enough raw material or production capacity or flights. They scramble. 72 hours after pre-sales begin, 10 million devices have sold. Yay, revenue. Boo, sleep deprivation. The SC team’s war room looks like, well, a room that’s been to war. Pizza boxes, Diet Coke bottles, angry wads of paper – litter the floor and tabletops. (Okay, maybe not a war war.)

…2 days before launch…

Flights touch down at LAX. 8 days after the SC team learned what they’d be making, iPhone cases – by the tens of thousands – screech across tarmacs only a six hour drive from Apple’s closest Distribution Center. Supply Chain victory! Whoa, not so fast. Competitors’ planes land, too. Our SC team tracks their shipment real-time. They’ve pre-cleared customs. The pallets get loaded onto a 53’ trailer and the driver powers up Interstate-5. Six hours 30 minutes later, the SC team contacts the forwarder, to confirm delivery. Confirmation cannot be made.

Panic ensues. Traffic congestion websites are consulted. Where’s the truck? What’s the driver’s mobile number? And then… the forwarder confirms the driver stopped for lunch. That hot dog costs the SC team forty-five minutes and now their truck waits behind their competitors’ at the Apple DC. Finally, Apple confirms receipt. The iPhone cases roll out to stores – just in time for the iPhone launch. Another invisible Supply Chain success.

How many pegs did they get? Did they win big over their competition? Did they learn to pack their truck drivers’ lunches?

I’m sure Simon Cowell wants to know. And as soon as he shows up at that Coffee Bean on Sunset, I’ll be ready with my second episode.

I’ve run (or been run by) the supply operations of Pfizer, Amgen, Cleveland Golf, Stila Cosmetics, and the U.S. Army. Today, in Los Angeles, there’s a medical device contract manufacturer’s supply chain with my paw prints all over it.  If you want to know the 5 questions your supply chain wants to ask you, check out http://logistics.about.com/.
Email: gary@supplychainrosco.com