Samsung Electronics and Apple are locked in a bitter fight for supremacy in the exploding smartphone and tablet market. But the real fight is about more than just introducing cooler touch-screen gadgets, it's about determining innovations in supply chain management (SCM), according to a senior official at technology industry researcher Gartner.
According to Gartner's table on supply chain management, Samsung is 13th among the global technology firms, while Apple retained its top status for the fifth consecutive year. However, Jane Barrett, Gartner's vice president of supply chain research, said that Samsung has been making leaps and bounds in improving its inventory of control and distribution strategies and carved its own edge in a number of areas.
Supply chain management is critical for large corporations that create most of their revenue outside their domestic base because they must find a balance between getting their products out to market quickly and keeping a low inventory. It's about more than just effectively running warehouses and distribution networks, but is also about the ability to detect and measure the impact of potential risks and being flexible and agile in cutting costs, Barrett said.
This has always been Apple's strength since its "iSomethings" became globally popular. New Apple CEO Tim Cook has been putting even more emphasis on improving the company's supply chain management as the company increasingly relies on partners in China, Taiwan and other developing nations to manufacture its products.
According to Barrett, companies that have strong sales and operations planning process, good alignment across supply chain management functions within their departments and trading partners are best positioned to navigate out of troubled waters.
Samsung and Apple's consistent and extensive investment in SCM have helped them retain market share and credibility. But according to Barrett, Korean companies need to keep building a strong SCM foundation regarding their organizational structure, people skills, process and enabling technology as they progress.
Earlier this week we posted a report that pointed to Microsoft was working with Asian component suppliers about a direct move into the smartphone business. However, I think that if you read between the tea leaves, Microsoft may have been also working to improve the overall supply chain for Windows based smartphones in general. In order to be able to compete with Apple on future mobile devices, Microsoft has to help their ecosystem carve out a more streamlined supply chain.
Intel began to reinvent their Supply Chain back in 2009 in preparation for the launching of their new Ultrabook. In July of this year Intel held a supply chain symposium focused on Ultrabooks. These efforts moved Intel from #16 to #7 on Gartner's top 25 Corporate Supply Chain list. There are a number of reports on this subject available from Gartner.
While consumers rightfully focus on the next great mobile device breakthrough, feature or service, the companies behind these products are battling with building out a credible supply chain so that they could deliver their products on time and in sufficient supply. Back in August we pointed to HTC getting assistance from the Taiwanese Government in creating a new supply chain that could compete with Apple. This is really where the battle lines are being drawn and where future battles will be fought.
No one could reliably predict when Apple's supply chain management prowess will be overtaken by one of their rivals, and until such time, Apple remains king of the hill.