As in warfare, a major element of global economic competition is logistics. Logistics is a subtle behind the scenes operation on which victory hinges, but it seldom gets a lot of attention until it fails. Guess what Tim Cook is a master of?
pl.noun [ treated as sing. or pl. ]
The detailed coordination of a complex operation involving many people, facilities, or supplies.
I've been thinking in greater detail about how Apple is conducting its war against Samsung. Normally, when we think about competing companies, we tend think think about product feature wars alone. Does this smartphone have a better camera? Does that smartphone have a longer battery life? And so on.
I think the reason we think that way about competing companies is because we have a certain geeky habit, developed over the years, of end user value estimation. The smartphone that has a better feature set has the most value. So we conclude the manufactuter is more capable. That's why we dwell on comparison charts. And, to be sure, Apple does make sure that its iPhone is feature complete and is beautifully made. Of course, Apple competes not only with industrial design but also with the technique of a beautiful and secure iOS that adds even more value to the handsome hardware.
But that's not all there is to Apple's war. There's a less visible, almost secret, part going on.
Logistics and Economic War
When I think about Apple fighting Samsung, I also think about the vast machinery of coordinating supplies, manufacturing, and inventory. During the U.S. Civil War, General Nathan B. Forrest believed that the winner is the one who "gets there firstest with the mostest." It doesn't matter if Apple's competition has a product with lots of features and it doesn't matter if it has clever TV ads if it can't build first class phones and get them efficiently moved around the world and put on sale.
Carrier considerations are also important. Carriers must perceive that they will benefit from offering the Apple iPhone, and it's Apple's job to court them as valuable business partners. That's why at most every Apple earnings report, we hear about how Apple has entered new geographical markets or engaged additional carriers in a specific market.
Another factor is the scalability of Apple operations. When human beings are primarily responsible for the final hand crafting of an iPhone, there are human limits to fast and how greatly production can grow. Scalability is constrained. That's why Apple is making an investment in robots to assemble its iPhone 6. "Foxconn Bringing in Robots for iPhone 6 Assembly."
Logistics can often overcome sporadic deficiencies or make up for mistakes in specifications of an iPhone made well in advance. For example, Apple suffered a little because Samsung was cashing in on customer demand with Galaxy S5's larger display. However, Apple was able to counter with a slightly less expensive iPhone 5c and get it in front of customers worldwide. That manufacturing capability helped hold the fort until Apple was able to develop the iPhone 6 with, we think, a 4.7-inch display.
Efficient logistics are also what allows Apple to generate significant profits that can, in turn, fuel its war machine, and make a massive investment in, we think, a sapphire display for the iPhone 6.
Finally, as with device features, logistics can also be used as a weapon to destroy an opponent's temporary advantages. Manufacturing and distribution can be used to wield a more competitive price, offer broader, more desirable and available options, or dive into markets that the competition can't compete in.
All this is what Tim Cook mastered when he was the Chief Operating Officer at Apple under Steve Jobs. Nowadays, Mr. Cook is the supreme allied commander, getting to market "the firstest with the mostest" where and when it counts. And Samsung will never admit to how it's being hurt — until it must finally report on earnings.
This aspect of Apple's logistics expertise is an often overlooked part of Apple's success and leads to a dangerous under appreciation of Tim Cook.
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Teaser graphic via Shutterstock.
