Gartner: Apple turns over inventory every five days

Technology research firm Gartner is always coming up with innovative ways to compare companies and publish their relative ranks in terms of one criteria or another. Last week, Gartner published the results of its 2012 Supply Chain Top 25, and Apple was at the top of the list.

On a scale of 1 to 10, Apple pulled in a composite score of 9.69, about 80 percent higher than second-place company Amazon and a full 436 percent higher than #24 HP. That score is based on a number of factors, including the opinion of corporate peers and Gartner analysts, the weighted three-year return on assets, and inventory turns. That last figure is a measure of how quickly a company can turn over its inventory. For Apple, that number comes out to 74.1 times per year -- essentially once about every five days.

The only company that bests Apple in inventory turns is McDonalds, not surprising when you consider that the company has to work with perishable food items. Apple's inventory turn figure indicates that every item in your local Apple Store, for example, stays there no longer than about five days before being sold.

Why is this number important? By reducing inventory holding costs and moving product more quickly from manufacturing to consumers, Apple is able to keep costs low and margins high, all of which contributes directly to the bottom line.

[via The Atlantic]