June 13th, 2007
Plan to buy an iPhone June 29? "Undoubtedly there will be shortages"
Are you planning to camp out at an Apple or AT&T Wireless store on June 29 for your iPhone? Or, are you warming up your thumb to hit “refresh” if you get timed out on the Apple Store site?
Well get ready for some painful moments on June 29 and up o eight weeks after.
It’s not just me who is saying this.
I’ve just heard back from one of the world’s top experts in the arcane but vital field of Supply Chain Management. That’d be Simon Croom, Ph.D., executive director of the Supply Chain Management Institute at the University of San Diego.
Not only does Croom teach and research this stuff. He even has a Supply Chain Blog here.
First of all, I should describe what supply chain management entails.
Supply chain management is one of the non-glamorous but necessary aspects of product marketing. These processes entail everything from ensuring that there are enough supplies of a given product, and these products reach retail, wholesale and online distribution channels on time and in a manner consistent with customer demand.Given the almost universal assumption that the huge demand for the Apple iPhone will be pretty darn close to an ultimate test for the supply chain management skills of Apple and AT&T, Croom doesn’t sound like he would be willing to bet on everything going smoothly.
Here’s what Croom told me in an email earlier this morning:
My view about the fulfillment and supply chain challenges of the iPhone are as follows:
Launching any product, especially one so hyped, means that the main task is ensuring sufficient supplies are available across the US market on launch. Undoubtedly there will be shortages, service issues and challenges for call centers set upto support users. Depending on reliability of the product, there may also be a rapid ramp up in returns and warranty claims. Using a global supply chain will likely cause more of a problem 4 – 8 weeks into the ‘first season’ of the launch. Pressure will also be felt for AT&T in terms of sales support – in particular trade ins, impact on the sales of other phones and customer’s expectations from a ‘revolutionary’ new product.
The bottom line is that the launch of the iPhone is a high risk supply chain challenge.
Prof. Croom makes several persuasive arguments. It is hard to find fault with any of them.
Russell Shaw is an enterprise computing journalist, analyst and author based in Portland, Oregon. See his full profile and disclosure of his industry affiliations.
