Process and Manufacturing, Part 1 (Apple)

Scott Francis
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There’s a fair amount of speculation that Apple may be moving from yearly updates to its iPhone and iPad product lines, to 6-month-updates.  This would represent a doubling of the pace of product introductions, and might result in smoothing out some of the demand spikes that occur around new product introductions.  It might also help keep competition at bay.  But the changes to process are significant, as John Sculley points out:

“I think they’re going through a very significant change now in terms of product cycles,” Sculley explains. “Traditionally Apple introduces products once a year; now it’s really introducing products twice a year. The complexity of that from a supply chain is immense, and Apple seems to be doing it well. So, I think that people are underestimating just how well Apple is run, and just how successful the company can be when it gets to that twice-a-year product introduction cycle.”

John is assuming this change from yearly to six months is a done deal.  He may be right.  Horace Dediu of Asymco captures the signs pointing to yes:

  1. All the major products were updated in the fall. That’s “unprecedented”
  2. “Launch ramp for iPhone steeper than ever”.  The iPhone is already in 101 countries!
  3. Addressing consumer anticipation of the next release.
  4. Hon Hai production shifts that Dediu thinks portend a more constant order book.

Dediu shares the view that this is a big effort:

I would also add that this change in cycle time is an enormous undertaking. Since Apple is an integrated company, not only production but marketing, design, hardware and software engineering must be re-configured. To put it in perspective, when Ford changed its operating mode from producing one model to a flexible mass production method pioneered by General Motors, the company had to shut down for production for six months.

The operational aspects are daunting and would affect almost all employees in the company. Therefore if it is happening it’s also possible that there is some knowledge of this change dissipating outside the company, perhaps explaining Sculley’s confidence in the claim.

The really interesting question is whether Apple can effectively double the design and marketing output to increase the demand for its products- and also increase the supply.

This is process at its core. Can superior processes allow Apple to double the throughput of new product launches?  That would be unprecedented at the size and scale of an Apple.  How much must those processes be rethought or revamped?  or is it only a matter of having more staff on hand to execute these critical processes in parallel and out-of-phase?