Apple Reigns Supreme in 2011

Apple Reigns Supreme in 2011

Tech giant moves into the top spot with strong revenue gains and inventory turns.

Apple Inc. was the supply chain king in 2011, at least according to Gartner Inc.'s standards. The technology research firm ranked Apple No. 1 on its annual Top 25 Supply Chains list published in May.

Similarly, Apple takes the top spot on this year's IW 50 Best U.S.  Manufacturers list, with supply chain performance playing a significant role in its No. 1 ranking. Apple's inventory turn rate was 70.5 in 2011. This is calculated by dividing the cost of goods sold, which for Apple was $64.4 million, by the company's average amount of inventory over the past two years.

Apple's inventory turn rate was second only to Houston-based natural gas producer Targa Resources Partners LP (IW 50 rank No. 45), an IW 50 newcomer that went public in December 2010. Apple also ranked second in return on assets, just behind Coach Inc., at 34.5%. Boosted by sales of its popular iPhone and iPad mobile devices, the Cupertino, Calif.-based manufacturer achieved the third-highest IW 50 revenue gain with a growth rate of 66% in 2011. (Click here for "Apple's Road to the Top")

IT Sector Leads the Way

The computers-and-other-electronics-products segment led all IW 50 product categories with seven companies represented on this year's ranking. That was followed by the food, chemical, and petroleum-and- coal-products sectors, which each had five companies on the IW 50.

IndustryWeek compiles the IW 50 Best U.S. Manufacturers list by ranking IW U.S. 500 companies based on their financial performance in six key areas over a three-year period. These include inventory turns, profit margin, asset turns, return on assets, return on equity and revenue growth. The most recent year accounts for 50% of the calculation, while 2010 is weighted at 30% and 2009 contributes 20%.

Consumer products dominated the top 10 with the likes of mattress maker Tempur-Pedic International Inc., Monster Beverage Corp. and tobacco producers Philip Morris International Inc. and Lorillard Inc. Many consumer products manufacturers cited international expansion as a major growth driver in 2011. Hansen Natural Corp. changed its name in January to Monster Beverage to reflect its popular Monster energy drinks. The company, based in Corona, Calif., moved up to No. 5 after holding down the No. 12 spot on last year's IW 50 list.

Monster achieved a return on assets rate of 26.5%, while revenues rose 30.6% to $1.7 billion in 2011. The company attributed its strong 2011 performance to sales of its new Monster Rehab line and expanded distribution of its Monster Energy brand to new international markets. Philip Morris International led all IW 50 manufacturers with a return on equity of 245% in 2011. The company cited strong demand in Asia as a growth contributor.

Third-ranked Polaris Industries Inc., a Medina, Minn., manufacturer of off-road vehicles, achieved an asset turn rate of 2.16, nearly even with 46th-ranked lawn and garden equipment producer Toro Co., based in Bloomington, Minn. The IW 50 asset turnover median is 1.29.

Apple unseated last year's IW 50 leader Western Digital Corp., which slipped to No. 33 this year. Hard-drive manufacturer Western Digital, based in Irvine, Calif., was the only company on this year's IW 50 ranking to experience a revenue drop. The company's revenue declined 3.3% in 2011 primarily due to a $5 drop in per-unit average selling prices.

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