7 June 2010 | Andy Allen

A report by AMR Research has named Apple as the company with best supply chain practices in the world for the third year running.

AMR praised Apple’s “embedded innovation, networked supply and demand shaping”. It also highlighted the company’s effective use of vertical integration as a strategy, in particular the purchase of chipmaker Intrinsity “acquired by Apple to ‘steal a march’ on competitors looking to enhance the performance of mobile devices”.

In a feature exploring the secret behind Apple’s success, SM found the company’s ability to bring together two sides of the supply chain (digital and physical) efficiently and at increasingly low cost is a central plank to its rise to global dominance.

Kevin O’Marah and Debra Hofman, the authors of the AMR report, noted that responsibility for the supply chain is moving to board level. “Twenty years ago, a typical product company had the supply chain reporting to manufacturing, with responsibility mainly for inbound materials management and outbound shipping.

“New data shows that supply chain reports to manufacturing in only 6 per cent of companies surveyed, while 61 per cent have the head of supply chain reporting directly to the CEO, general manager or president of the business. It seems clear that supply chain has grown up and the business has taken notice.”

The report also noted that there is growing evidence of a link between effective supply chain activities and good financial results.

Procter & Gamble took second place in the report, while Cisco Systems was third.