According to the book "Steve Jobs" by Walter Isaacson, Steve Jobs returned to Apple in 1997. At that time, Apple's supply chain was an absolute mess! The company held $500 million of inventory which was about 2-month coverage, much more than those of the other technology companies. Jobs also run operations management on a daily basis, which resulted in relationship problems with key vendors and third-party logistics providers.
Steve Jobs met Tim Cook
In 1998, Steve Jobs invited Tim Cook for an interview while Cook was working as a procurement and supply chain leader at another company. Jobs explained to Cook that he wanted to implement the lean manufacturing system the same way Michael Dell did at Dell. Cook shared the same vision with Jobs and later decided to join Apple.
What Tim Cook Actually Did
Cook realized that Apple's supply chain was too complex to handle. So he reduced the number of key suppliers, from 100 down to 24. Cook also asked them to consider the price discount and relocate closer to Apple's factory.
Cook reduced the number of warehouses, from 19 to 9 and slashed inventory levels from 2 months to 1 month. By September 1998, the inventory level was down to 6 days. He also reduced the manufacturing cycle time, from 4 months down to 2 months. This is an example of effective inventory management.
Within the first 2 years, Tim Cook simplified Apple's supply chain big time, and this generated huge cost savings and improved customer service drastically.
Leadership Quality
There are 7 traits of leadership that make Tim Cook stand out in the eye of Steve Jobs. More information can be found below,
As you may know, Jobs was a big fan of F-words! However, Cook had a very different perspective.
"What I learned about Steve was that people mistook some of his comments as ranting or negativism, but it was really just the way he showed passion. So that’s how I processed it, and I never took issue personally"
So Cook is the kind of person who tries to understand other people first.
2. Put first thing first
In order to achieve a quick result, Cook worked very hard. He was up at 4.30, went to Gym and was ready at his desk around 6am. Then, he arranged a Sunday meeting so he could prepare what to do for the week to come. He always prioritizes his tasks efficiently.
3. Be proactive
When Cook reported a problem with one of Apple's suppliers in China, he said to his team, "Someone should be in China driving this". Thirty minutes later, one of his staff was still in the office, then, he asked: "Why are you still here?" His staff then drove directly to the airport and bought a ticket to China. Cook chose to negotiate and fix the situation quickly rather than letting it slide.
4. Avoid analysis paralysis
Cook got an undergraduate degree in industrial engineering from Auburn University and an MBA degree from Duke University. Without a doubt, he got very good project management and analytical skill. However, there were times that he relied on gut feeling or intuition (especially when the situation is complex and the choices are equally good/bad). Our observation is that companies that implement six sigma tend to rely too much on statistics for making the decision.
5. Keep calm
Jobs and Cook are like Yin and Yang. It's Cook's calm demeanor that counteracted Jobs' control freak style of management.
6. Be humble
Some people just know Cook after he became the CEO because Jobs seemed to take the credit for Apple's success. However, Cook said,
"Some people resent the fact that Steve gets credit for everything, but I’ve never given a rat’s ass about that. Frankly speaking, I’d prefer my name never be in the Paper."
7. Be honest and learn from mistakes
When the Apple Map app didn't meet the customer's expectations, Cook apologized for the mistake and recruited an army of GIS specialists to improve the app.
Tim Cook has set a new standard for supply chain practitioners to follow. Are we committed to bringing positive change to the SCM community?
References
- Isaacson, W. (2011). Steve Jobs. Simon & Schuster.
- Yoffie, D. B., & Rossano, P. (2012). Apple Inc. in 2012. Harvard Business School.
Books We Recommend
- 7 Best Supply Chain Books of All Time
- 7 Best Purchasing Books Ever Written
- 7 Best Operations Management Books CEOs Read
- 7 Best Inventory Control Books Ever Written
- 7 Best Lean Books Ever Written
Last review and update: July 5, 2022