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A supply chain is a system consisting of every component starting at raw materials and ending at the consumer end. So, everything, including the people, research, development, production, organization, marketing transportation, etc., is a part of the supply chain. Supply chain management is key to the success of an operation and the profitability of an organization.
Apple has the best supply chain in the world and has been ranked "Best in World" by research firm Gartner each year from 2010 to 2013. Apple has an innovative supply chain. Apple purchases components from various suppliers and sends them to its manufacturing facility in China, where products are shipped worldwide (if you are purchasing from Apple's website). Apple carries out most of its research in-house, patents it and uses it (or in some cases, buys the technology itself by acquiring the appropriate smaller player). Apple has kept a very small number of warehouses. All the online orders are facilitated through intermediate warehouses via UPS/FedEx. All other orders are fulfilled through its warehouse in Elk Grove, California.
An important technique for Apple has been highly efficient inventory management. Apple keeps only five days of inventory (year 2012), since products in warehouses are equivalent to money sitting idle, but unlike money, may be useless after a while. For example, Apple sold all the iPad2s it made in July 2011. Its inventory level was $2.1 billion for the first quarter of 2014, compared to $170 billion in annual sales in 2013.
Apple has indeed perfected the supply chain and it has helped make Apple the company with highest market worth.
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