Cupertino

"Daniel Vidaña, a director of iMac supply management, says the scale Cupertino required was “insane.” On average, Apple was selling 5,000 iMacs per day. The operations team had to be ultra-efficient to avoid hemorrhaging cash, as the iMac was meant to be a low-cost product that families would buy. The multiple color options, he adds, amplified complexity and uncertainty. “I was in charge of the planning side of things,” Vidaña says. “I was telling the factories every week which colors, which models, had to be built. That was sent to our logistics teams and the manufacturers, but they weren’t doing it. Every day we got a report saying, ‘This is what we built.’ They were not adhering to our plan. They were not building what we wanted; they were building what was easiest for them. And they were only building in quantities they could manage or handle in the supply chain.”"

"Given Apple’s scale and manufacturing concentration, the result of this strategy is that Apple spawned the formation of major industrial clusters in which engineers from Cupertino would teach multiple factories how to, say, shape glass for the iPhone. So instead of being beholden to Lens Technology—the company that cut and tempered Corning glass for the first iPhone—Apple would constantly send engineers from Cupertino to train its rivals. That kept Lens on its toes, lest Apple choose a different supplier for the next-generation iPhone—a potential catastrophe as Apple, by 2015, was producing a quarter billion iPhones per year. Moreover, it kept Lens from raising its prices. So any company supplying Apple with some component was preemptively thwarted from believing it had any power to exert, because Apple made it known that it had options."