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January 30, 2024

The Supply Chain Masterminds behind Amazon and Apple

By John Willis

To thrive, let alone survive, in the modern-day worlds of technology and retail, companies need to develop adaptable and robust supply chains that can efficiently get a finished product to consumers. Specifically in these two worlds, however, two giants stand out as a testament to the practices of supply chain management: Amazon and Apple. Moreover, these companies even helped develop the playbook for modern-day supply chain management. 

In the late 1990s, supply chain management ideas were getting their footing as technology transformed from overseeing a series of separate processes into one that could be centrally coordinated. At this same time, both Amazon and Apple were at pivotal moments of growth and development. At the helm of these now iconic companies, Jeff Bezos and Steve Jobs faced the tremendous task of scaling and building out their burgeoning businesses with this new framework. To do this, Bezos and Jobs strategically hired two outsiders to build out their supply chains: Jeff Wilke for Amazon and Tim Cook for Apple. While Bezos and Jobs hired these two individuals due to their technical proficiency, little did they know they would be the masterminds behind Amazon’s and Apple’s supply chain revolution.

Jeff Wilke and Amazon

It was 1998, and Amazon was riding high after an incredibly successful IPO the year before that raised $54 million. But Bezos wanted more. 

He believed it was time to transition the company from an online book store into his original goal of an online everything store. Amazon had developed a convenient and cheap online alternative to the traditional bookstore, but how could Bezos establish a system to scale into other categories? The clock was on to find the right person for the job as the company had the momentum and funding to branch out, and after some digging, Bezos found a promising candidate: Jeff Wilke.

Up to that point, Wilke’s professional narrative had twists and turns through Massachusetts Institute of Technology (MIT), graduating in 1993 from the Leaders for Global Operations (LGO) program with an MBA, a stint at Andersen Consulting (now Accenture), where he honed his coding skills and managed software development projects, and some time as VP and General Manager of pharmaceutical fine chemicals at AlliedSignal (now Honeywell) where he navigated various operations and general management assignments, learning about the chemical and electronics industries. 

Wilke brought impressive academic prowess and a unique blend of practical experiences to help Amazon, and his exposure to principles like lean manufacturing, statistical process control, and purpose-built software would prove invaluable assets.

When Wilke was hired in 1999, he had a monumental task in front of him, and after searching and searching, he would find the answer to it in the distribution centers. As he toured some of the distribution centers, he noticed that Amazon was modeled after Walmart’s logistics, which worked for physical stores but would not work for the sheer size and scale of e-commerce. The new method would be completely reworking Amazon’s supply chain, creating fulfillment centers near consumers for easy delivery, and hiring data scientists and statistical process control experts to develop a system to determine how much stock to store at each fulfillment center. And the results showed. In 1999, Amazon grossed $2 Billion. In 2021, Amazon grossed $1 Billion a day.

Tim Cook and Apple

While Amazon was tasked with developing a supply chain for its Everything store in 1998, Apple was in a slightly different situation. It was a tumultuous time for Apple, a shadow of its former glory during the PC revolution. Apple had been losing sales for years and became a laughing stock of the tech community. As a last-ditch effort, Apple brought back Steve Jobs as the CEO to usher in an era of restructuring in its product line. While Jobs knew he could reinvigorate the products, the distribution system was a bottleneck he needed to gain expertise in fixing. He would need to outsource just as Amazon did, and that’s when he found Tim Cook. 

While from humble beginnings in a small farming community outside of Mobile, Alabama, Cook earned an MBA from Duke University and a Bachelor of Science in Industrial Engineering from Auburn University. Cook also worked as the director of North American Fulfillment for IBM, where he led manufacturing and distribution, and at the time of his interview with Jobs, acted as vice president of Corporate Materials for Compaq, managing all of its product inventory.

Like Wilke, Cook developed a critical skill set in supply-chain management and industrial engineering that would be crucial to Apple’s growth. When Cook started his role at Apple as senior vice president for worldwide sales and operations, he immediately closed factories and warehouses. He replaced them with contract manufacturers, which reduced the company’s inventory.

Conclusion

Jeff Bezos and Steve Jobs knew they needed help implementing supply chain management. They needed people with skills and experience in lean manufacturing and statistical process control to build supply chains. Their keen ability to hire experts who understood supply chain intricacies ensured the success of their respective companies. Jeff Wilke and Tim Cook, each in their own way, left an indelible mark on the distribution and supply chain landscape, not only on their respective companies but also on supply chain management. Both Amazon and Apple’s development of supply chain management acted as the accelerator of the digital Cambrian Explosion and helped grow the Information Technology Sector as a whole. Jeff Wilke and Tim Cook’s legacies continue to shape how we receive and enjoy our favorite products, setting the bar high for future industry leaders.

- About The Authors
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John Willis

John Willis has worked in the IT management industry for more than 35 years and is a prolific author, including "Deming's Journey to Profound Knowledge" and "The DevOps Handbook." He is researching DevOps, DevSecOps, IT risk, modern governance, and audit compliance. Previously he was an Evangelist at Docker Inc., VP of Solutions for Socketplane (sold to Docker) and Enstratius (sold to Dell), and VP of Training & Services at Opscode where he formalized the training, evangelism, and professional services functions at the firm. Willis also founded Gulf Breeze Software, an award winning IBM business partner, which specializes in deploying Tivoli technology for the enterprise. Willis has authored six IBM Redbooks for IBM on enterprise systems management and was the founder and chief architect at Chain Bridge Systems.

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