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Apple joins President Obama's 'SupplierPay' initiative aimed at boosting U.S. small business

post #1 of 98
Thread Starter 
The Obama administration announced on Friday that Apple is one of a number of U.S. corporations -- including Coca-Cola and IBM -- that have agreed to pay smaller component suppliers more quickly in an effort to increase cash flow throughout the supply chain.




Dubbed "SupplierPay," the new program is a private-sector extension of QuickPay, a federal initiative designed to ensure that small contractors are paid within 15 days of submitting an invoice. This enhanced cash flow helps small businesses avoid the need to borrow money, the government says, increasing their chances to prosper.

"For the larger companies, joining SupplierPay demonstrates a recognition that a healthy supply chain is good for business," the White House said in a release. "For the small business suppliers, benefiting from SupplierPay means having more capital to invest in new opportunities, new equipment, and new hiring."

According to the White House, companies often take as long as two months to pay their suppliers. This restricts the smaller firms' ability to make capital investments or even pay subcontractors without accessing credit, where debt service obligations can make it yet more difficult to operate.

Apple has long been seen as an advocate for supply chain responsibility, releasing an annual report on the subject that details its efforts to enforce its Supplier Code of Conduct throughout its hundreds of contractors.

Though much of the company's attention is focused on issues like child labor and conflict minerals in developing nations, it has also worked to address labor problems at home. Apple's all-new Mac Pro is manufactured at a facility in Texas, for instance, not far from a Samsung-owned plant that fabricates A-series processors for iOS devices.
post #2 of 98
Jack Tramiel would be screaming if he were still alive.
post #3 of 98

Glad to hear this piece of good news. On the other hand, companies like Amazon, not a small company, can take 90 days to pay. May guess, based on the way they have been behaving, is they would like to not pay at all.

post #4 of 98
Good lord. Apple needs to be a bit more aware that there is "not a lot of love left" for this president, this administration and anything to do with Washington right now.

They need to not be so closely tied to an administration that has so many negatives associated with them.

In addition, any perception that Apple is receiving "marching orders" from Washington is distasteful and will tarnish their image somewhat. Why even invite such associations?

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post #5 of 98
Apple has always failed us in their unwavering devotion to mainstream politics. Nothing has changed under Tim Cook.

FFS, Al Gore of all people is (still?) on the board. He should be in an institution.
post #6 of 98
Quote:
Originally Posted by SpamSandwich View Post

Good lord. Apple needs to be a bit more aware that there is "not a lot of love left" for this president, this administration and anything to do with Washington right now.

They need to not be so closely tied to an administration that has so many negatives associated with them.

In addition, any perception that Apple is receiving "marching orders" from Washington is distasteful and will tarnish their image somewhat. Why even invite such associations?
This. Regardless of ones politics this gives the impression that when the government says "jump" Apple says "how high?". Is Apple a company known for not paying suppliers quickly enough? Why isn't Amazon at this meeting?
post #7 of 98

I've been out of accounting for many years now, but this is all addressed in the credit agreement between companies.

 

Generally, terms for a company with an adequate credit rating would be "Net 30" which means payment is due 30 days after invoicing.  The other thing that used to be popular was "2% 10, Net 30" terms which would provide a discount as incentive for early payment.  I worked for a company where we streamlined our payment processing to take advantage of 2% 15, Net 45 terms because we felt like the discount at that time was worth more to our bottom line than the additional access to the cash flow.

 

I guess the deal here is that Apple, IBM, Coca-Cola, the US Govt., etc. are big enough to basically dictate credit terms to small suppliers, but that is actually factored into cash flow projections for large companies.

 

I'm not sure how this is going to change standard net payment terms for other companies unless it's designed to set an example, but business people tend to make full use of whatever terms they are given.  Even though electronic payments and verified payment processing could shorten payment cycles, the finance and accounting types have become accustomed to holding that cash for cash flow purposes.  I don't think you are going to be able to use this to "shame" your typical Fortune 500 company into faster payment processing based solely on the size of the supplier.  I could be wrong, but I don't think I am.


Edited by John.B - 7/11/14 at 7:48am

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post #8 of 98
Quote:
Originally Posted by Rogifan View Post


This. Regardless of ones politics this gives the impression that when the government says "jump" Apple says "how high?".

Really?  I'd say it gives an impression that Apple are engaged and willing to sacrifice their own margins to support the broader market.  That's responsibility, not weakness.

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post #9 of 98
Quote:
Originally Posted by pmz View Post

Apple has always failed us in their unwavering devotion to mainstream politics. Nothing has changed under Tim Cook.

FFS, Al Gore of all people is (still?) on the board. He should be in an institution.

I have never understand the venom people have with Al Gore being on Apple's board of directors. Would you please enlighten me to why you do not like the man?

post #10 of 98
Quote:
Originally Posted by Crowley View Post

Really?  I'd say it gives an impression that Apple are engaged and willing to sacrifice their own margins to support the broader market.  That's responsibility, not weakness.
If this is good for the broader market businesses shouldn't need a government law or White House summit to implement it. The optics of this to me is Apple taking orders from the Obama administration. IMO those aren't good optics.
post #11 of 98
Quote:
Originally Posted by Rogifan View Post


If this is good for the broader market businesses shouldn't need a government law or White House summit to implement it.

Why not?  Markets can be wrong, markets can be self-destructive and markets can fail.  So can government and regulation of course, neither are perfect.

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post #12 of 98
Quote:
Originally Posted by Rogifan View Post

This. Regardless of ones politics this gives the impression that when the government says "jump" Apple says "how high?". Is Apple a company known for not paying suppliers quickly enough? Why isn't Amazon at this meeting?

You'll need to ask Amazon why they weren't there. It might have something to do with Amazon being small peanuts compared to the other companies invited, mostly Dow 30 Industrial components (Apple is the exception, but then again, they have more market cap than any other company)

 

This program isn't a punishment; it is a strictly voluntary, Apple was not required to participate. SupplierPay identifies that some of the private sector leaders (a.k.a. "big business") are serious about acknowledging that small businesses help their own, and that they are willing to make an effort in helping the latter thrive by addressing one of the financial challenges typical of smaller businesses (cash flow).

post #13 of 98
Quote:
Originally Posted by Crowley View Post
 

Really?  I'd say it gives an impression that Apple are engaged and willing to sacrifice their own margins to support the broader market.  That's responsibility, not weakness.

 

It does not sacrifice margin.   It only sacrifices cash flow and with Apple's hoards of cash, they don't have to borrow money so holding payments back from suppliers doesn't do much for them.

 

If Apple had decided this on their own, the fanboys would be cheering Apple's responsible stance.   Because this program of encouraging large companies to pay small companies faster was apparently government-driven, suddenly it's bad news because Obama was involved.    Total hypocrisy.  

 

This is a good idea and should be welcomed no matter whose idea it was.   It helps smaller companies.    And if their deal with the company was that Apple gets to take a discount if it's paid in 10 days, then Apple can actually save money. 

 

Retailers (both physical and online) also play this game.   They defer paying for the products they buy from wholesalers for as long as possible.   In essence, they really don't want to pay the wholesalers/distributors until they themselves have sold the product and collected the cash.    This is especially true for retail chains.    When Circuit City went out of business, I think they owed Nikon something like $90 million.    You can be assured those weren't just products they had bought in the previous 30 or even 90 days. 

 

But then retailers have the nerve to automatically take the "net 10" discount anyway.    I can't say I know specifically what terms Amazon has been paying on or what they've been asking for in new contracts, but my general understanding is that they take a long time to pay publishers and manufacturers.   

post #14 of 98

Completely meaningless.

 

If Apple really wants to help small business they should apologize for choking off supply of Apple hardware to 3rd party computer stores and pledge availability of Apple hardware equal to that of company owned stores going forward.

 

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post #15 of 98
This is a good thing... and Apple is a well positioned company to take this principled stance when working with their partners.

But...

This has anything to do with the government, because why?
post #16 of 98
Quote:
Originally Posted by bobringer View Post

This is a good thing... and Apple is a well positioned company to take this principled stance when working with their partners.

But...

This has anything to do with the government, because why?

Point to the industry-led initiative to take the principled stance.  That's why.

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post #17 of 98
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Originally Posted by leavingthebigG View Post
 

I have never understand the venom people have with Al Gore being on Apple's board of directors. Would you please enlighten me to why you do not like the man?

 

Well... maybe he shouldn't say that people are science hating flat earthers who need to be shunned like racists in the 60's... for no other reason than the fact that they disagree with him on the climate.  Ya think maybe it could have something to do with that?  He contributes to a major problem in this society where anybody with a differing opinion is evil... instead of just someone with a different opinion.  Have you SEEN the internet?  It's full of this.  Our "leaders" should be above those games, which should be left to the fringes and other crazies on the internet.

post #18 of 98

Apple is a valuable brand, the best brand name in the world.

 

The Obama brand is one of the worst and most unpopular names in the US currently, and Apple should not be tarnishing their good name by associating with it. 

post #19 of 98
Quote:
Originally Posted by bobringer View Post
 

 

Well... maybe he shouldn't say that people are science hating flat earthers who need to be shunned like racists in the 60's... for no other reason than the fact that they disagree with him on the climate. 

 

Yes, he's a complete lunatic, a vile person, and should not be on Apple's board. 

post #20 of 98
Quote:
Originally Posted by zoetmb View Post
 

 

It does not sacrifice margin.   It only sacrifices cash flow and with Apple's hoards of cash, they don't have to borrow money so holding payments back from suppliers doesn't do much for them.

True enough, thanks for the correction.  I think it probably has a fair impact though.  I seem to remember reading that Apple normally negotiated a 90 day window for paying their subcontractors (no citation, sorry), so taking that down to 15 days is a substantial reduction, which commits their cash when it could be sitting in a high interest-bearing account, or doing something else.

 

"Fair impact" obviously comes in the context of Apple's many billions of reserves, so I'm sure they'll be fine.

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post #21 of 98
Quote:
Originally Posted by SpamSandwich View Post

Good lord. Apple needs to be a bit more aware that there is "not a lot of love left" for this president, this administration and anything to do with Washington right now.

They need to not be so closely tied to an administration that has so many negatives associated with them.

In addition, any perception that Apple is receiving "marching orders" from Washington is distasteful and will tarnish their image somewhat. Why even invite such associations?
Quote:
Originally Posted by Rogifan View Post

If this is good for the broader market businesses shouldn't need a government law or White House summit to implement it. The optics of this to me is Apple taking orders from the Obama administration. IMO those aren't good optics.

It reads like you two want to Apple to do what John Boehner does and oppose anything Obama says regardless of its merit.

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post #22 of 98
How often does Apple pay out to developers in their App Store?

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post #23 of 98
Quote:
Originally Posted by Rogifan View Post


If this is good for the broader market businesses shouldn't need a government law or White House summit to implement it. The optics of this to me is Apple taking orders from the Obama administration. IMO those aren't good optics.

 

It's not a law, it's completely voluntary and it's harmless to Apple.    There's nothing wrong with a White House summit to "encourage" it.    It's the White House getting American companies involved and saying, "look, we have this problem - can you help these smaller companies out?"    It's not "taking orders" from the Obama administration - industry has certainly ignored and criticized the administration many times - especially the banks and other beneficiaries of the bailouts even though it was this (and the prior) administration who got them the bailouts.  

 

In fact, my criticism of Obama is that he hasn't used the 'bully pulpit' of the Presidency often enough to either explain his positions or to encourage Americans to push their legislators to vote for certain laws/programs.    Obama was a great communicator during his campaigns but a lousy communicator during the actual Presidency.

 

I think, for example, that Obama should have gotten on TV and taken the position that companies need to hire more American workers to keep the country strong.   Or even without legislation, to raise pay beyond the current Federal minimum wage.   Etc.

 

While it was a different time and with only a maximum of 7 TV channels in each city, it was easier to get eyes, LBJ got Civil Rights legislation passed because he got on TV and explained to the American people why it was necessary, especially after Selma and after the Klan planted a bomb in the church and young girls were killed.  

 

My view isn't that the problem is that Government gives orders to Business.   It's that Business, via lobbyists and the associated legislation that gets passed (or not passed), essentially gives orders to the Government. 

post #24 of 98
Quote:
Originally Posted by Rogifan View Post

If this is good for the broader market businesses shouldn't need a government law or White House summit to implement it. The optics of this to me is Apple taking orders from the Obama administration. IMO those aren't good optics.

You guys making this point sound insane to me, but I guess I am in the minority. I thought small business was the backbone of the economy. I though small business created 70(?)% of all new jobs. I thought we wanted less people on government handouts. It reads like we don't like this because of who suggested it rather than basing it on the its merits. Here is something that costs nothing and provides benefit. It's not mandatory - just an idea.

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post #25 of 98

I have done services including consulting and programing for about 20 years. Originally their standard terms were paying 30 days after the invoice, but if your contact at Apple marked the invoice rush you got paid in 10 days.

 

That was great for small biz. However, around 2000 they changed so that everyone was paid 45 days after the invoice was issued, no exceptions.  In addition to that, because they use SAP for an approval process on the invoice, sometimes invoices were not approved to be paid because someone at Apple forgot to check a box or get some other approval of a manager.

 

Even worse you could not check on if all the approvals were obtained and the invoice was in line to be paid until it was past due. Apple Accounts Payable will not talk to you unless your invoice is past due.

 

We did a programming project that had a midpoint review for the project in order to get paid half of the cost and did not receive the midpoint review payment until 2 weeks after the entire project was complete.

 

They are not a fun company to do business with. Many unnecessary rules. You have to go through a yearly procurement review and named them as additional insured on your auto insurance. Why? 

 

My company does about $3 million a year in consulting and about $100,000 with Apple and they are by far the biggest pain to do business with. If it wasn't for my friends there I would cease to do business with them. I sincerely hope this SupplierPay helps.

post #26 of 98
Quote:
Originally Posted by SolipsismX View Post


It reads like you two want to Apple to do what John Boehner does and oppose anything Obama says regardless of its merit.

I personally pay no attention to John Boehner. It's aligning Apple too closely with an unpopular president that I take issue. If Bush was still president, would it be wise for Apple to align with him?

Apple is a company that serves customers regardless of their beliefs. Politics is a cesspool that should be avoided by companies, except if it is core to their operations.

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post #27 of 98
Quote:
Originally Posted by zoetmb View Post
 

Obama was a great communicator during his campaigns but a lousy communicator during the actual Presidency.

 

 

I totally disagree. He was always a stuttering person who didn't display much confidence, and masses of people were fooled by the teleprompting reading charlatan. There were always those who saw right through him. And many of those poor people who placed any faith in the mountain of lies that came out of his mouth, are surely regretting their decision today.

post #28 of 98
Quote:
Originally Posted by SpamSandwich View Post

I personally pay no attention to John Boehner. 

 

He is also somebody who is a joke. It seems like he's constantly crying. What's his problem?

 

Maybe he should move down to Brazil or something, because it seems like they like to cry a lot too. How pathetic.

post #29 of 98
Quote:
Originally Posted by SpamSandwich View Post

I personally pay no attention to John Boehner. It's aligning itself too closely with an unpopular president that I take issue. If Bush was still president, would it be wise for Apple to align with him?

If it was an ethical decision with clear benefits then popularity shouldn't be a concern.

PS: This is sounding like those teen movies where the popular boy/girl hangs out with the unpopular girl/boy and then gets shunned by her/his peers as a result. Is that the message we want express?

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post #30 of 98
Quote:
Originally Posted by Apple ][ View Post

I totally disagree. He was always a stuttering person who didn't display much confidence, and masses of people were fooled by the teleprompting reading charlatan. There were always those who saw right through him. And many of those poor people who placed any faith in the mountain of lies that came out of his mouth, are surely regretting their decision today.

I was never a supporter because I'm not a Democrat, but are there any Democrats left who actually believe a word this president says? I'm amazed any are left who defend the man.

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post #31 of 98
Quote:
Originally Posted by SolipsismX View Post

If it was an ethical decision with clear benefits then popularity shouldn't be a concern.

PS: This is sounding like those teen movies where the popular boy/girl hangs out with the unpopular girl/boy and then gets shunned by her peers as a result. Is that the message we want express?

I think it's a bit more serious than schoolyard politics. Obama, even more so than Bush, has been called one of the most egregious offenders when it comes to our nation's history of presidents who have actively undermined the Constitution. I'd not be so fast to cuddle up with him. Fairly or unfairly, Obama has come to symbolize what is bad about big government and he also has a poor reputation overseas.

Do you think China and Europe will be more positive or less positive about Apple if they are seen as a lapdog for the biggest spying organization in the world (aka our government)?

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post #32 of 98
Quote:
Originally Posted by SpamSandwich View Post

I was never a supporter because I'm not a Democrat, but are there any Democrats left who actually believe a word this president says? I'm amazed any are left who defend the man.

 

Some have turned against him, but there will always be those who will stick it out until the end, no matter what. In a bunker in Berlin, with the Soviets mere blocks away, there were still some crazy people left who supported their dear leader until the very end.

post #33 of 98
Quote:
Originally Posted by SolipsismX View Post


It reads like you two want to Apple to do what John Boehner does and oppose anything Obama says regardless of its merit.
No. If Apple's not already doing this and it's a good idea than just implement it. No need to send someone to Washington to be a prop for the Government. And I'd say this regardless of which party controlled the White House.
post #34 of 98
Quote:
Originally Posted by LarryA View Post

You guys making this point sound insane to me, but I guess I am in the minority. I thought small business was the backbone of the economy. I though small business created 70(?)% of all new jobs. I thought we wanted less people on government handouts. It reads like we don't like this because of who suggested it rather than basing it on the its merits. Here is something that costs nothing and provides benefit. It's not mandatory - just an idea.
Nope. If it's a good idea companies should just do it. No need for a meeting or a summit which is basically just a photo op for the White House.
post #35 of 98
Could AI just use the correct Apple Logo please!
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post #36 of 98
Ah the wailing and gnashing of teeth of the faux news watchers. Won't consider an idea on its merits. It's always the politics.
post #37 of 98
Quote:
Originally Posted by Apple ][ View Post
 

 

I totally disagree. He was always a stuttering person who didn't display much confidence, and masses of people were fooled by the teleprompting reading charlatan. There were always those who saw right through him. And many of those poor people who placed any faith in the mountain of lies that came out of his mouth, are surely regretting their decision today.

 

Yes, it's too bad Obama isn't as good a communicator as George W. Bush.  Bush never mangled words or sentences or thoughts.   And there hasn't been a President in half a century who didn't use a teleprompter.   Get real.   

 

I think Obama was weak in some ways, but it's amazing he accomplished anything at all considering that from Day 1 of his presidency, Republicans declared that their mission was to see him fail.   

 

And if you want to count the lies, I think Republicans easily win that race. 

post #38 of 98
Quote:
Originally Posted by DrDavid View Post

Ah the wailing and gnashing of teeth of the faux news watchers. Won't consider an idea on its merits. It's always the politics.

Since compliance is voluntary, this "program" is largely irrelevant anyway. It's all about appearances.

Also, not everyone who is disgusted or disappointed with this president is a Fox News follower or identifies with the Tea Party. I don't watch Faux News. 1wink.gif

Even Obama's own Washington supporters have distanced themselves. They want to get re elected!

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post #39 of 98
Quote:
Originally Posted by zoetmb View Post

Yes, it's too bad Obama isn't as good a communicator as George W. Bush.  Bush never mangled words or sentences or thoughts.   And there hasn't been a President in half a century who didn't use a teleprompter.   Get real.   

I think Obama was weak in some ways, but it's amazing he accomplished anything at all considering that from Day 1 of his presidency, Republicans declared that their mission was to see him fail.   

And if you want to count the lies, I think Republicans easily win that race. 

Is it possible for one to agree that Bush was a lousy president and also acknowledge that Obama is as bad, if not worse?

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post #40 of 98
Quote:
Originally Posted by SpamSandwich View Post


Is it possible for one to agree that Bush was a lousy president and also acknowledge that Obama is as bad, if not worse?

Much worse. The worst since WWII, according to recent polls.

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