Apple Turned Over Its Inventory Every Five Days In 2011
When people joke that Apple devices sell like hotcakes, it turns out that they're halfway right; the Cupertino-based company has one of the fastest inventory turnover rates of all the businesses examined in a recent Gartner report, second only to McDonald's. Apple sells through its inventory roughly every five days!*
The Atlantic's Alexis Madrigal points out, "This is a company that sells hundreds of millions of hardware gadgets all over the world and yet it doesn't actually need to stockpile its goods." Unsurprisingly, on the back of that and other factors, the Gartner report names Apple's supply chain as the best in the world.
According to Gartner's figures, Apple does 74 inventory turns yearly. By comparison, Dell's inventory turns 35 times a year and Samsung's stock flips 17 times.
Inventory can be a costly business expense if handled incorrectly, especially in the technology industry, where building inventory involves high sunk costs. If you don't sell your stock quickly, the cash you spent to build the inventory basically sits in your stockroom, slowly depreciating in value. Our recent article on RIM's $1 billion-plus inventory stockpile (and its numerous associated accounting writedowns) highlights the dark side of keeping too much product on your shelves -- something Apple's well-oiled supply chain isn't having a problem with.
*For what it's worth, McDonald's inventory turnover rate is approximately double that, or around every 2.5 days.
Image credit: Neil Bird/Flickr