Apple Inc. Supply Chain Management

The supply chain is a field concerned with the movement of goods and services from the point of manufacture to the final consumer. The paper focuses on Apple Inc. as a leader in the supply chain management. Apple is dealing with technologically differentiated products such as Mac, iPhone, iPad and the IOS operating systems among other products. The mission statement gives the directions for the operations of the company. Apple has succeeded in establishing close coordination globally by outsourcing, setting objectives for the suppliers and other strategies. The research and development have helped the company to differentiate its products in terms of technology and generate sufficient profits to sustain the market position of the company.

Global Supply Chain Management

The supply chain management entails the control that is concerned with the movement of goods and services. It comprises of the movement and storage of the raw resources, finished products and the inventory from the point of manufacture to the consumption stage. The networks in supply chain management are linked and the business channels are concerned with the provision of goods and services as needed by the consumers in the supply chain. Notably, supply chain management involves monitoring, designing, controlling, planning and execution of an action with the aim of developing the net value. Moreover, other actions include the development of infrastructure, evaluating the performance internally and internationally and also harmonizing the supply and demand.

This research outlines the supply chain management as a critical tool for Apple Inc. in analyzing the internal and external activities of the company. The tool assists in the analysis of business so as to understand the nature of business of the company as well as identify the strengths, weaknesses, opportunities and the threats. The supply chain management will help to identify the individual performances and the benefits derived from the management, products, leadership and other elements.

Apple Inc.

Apple Inc. is an American international corporation, whose headquarters are based in Cupertino, California. The company manufactures products in the mobile network communication and devices, network solutions, personal computers among other products offered by the company include iPhones, Apple TV, iPods, Mac, iPads among others. Apple uses the IOS and OS X operating systems for its products, which gives it a unique element when compared to the other devices and products in the market (Blenko et al. 2016, p.7). The company was established by Steve Jobs, Stephen Wozniak and Ronald Gerald Wayne and flourished immensely in the market for over a long. The company has increased its customer base from the United States to other nations in the world. The revolution of the Apple company has brought new ideologies in the technological world and has offered competition through the differentiated products it has in the market. Apple Inc. is an organization that is undergoing key modifications in the organizational structure and culture. The modifications have been as a result of the events, which have taken place over the number of years, and the advancement in technology that has impacted the production process (Christopher 2016, p. 34). To be specific, the company has undergone a critical revolution over a very short span of time, thus helping it establish well in the market.

The management has reorganized the structure of the company and reevaluated the organizational culture to embrace change, realize the basic objectives as well as outperform the current trends in the market. The structure of the company has salvaged the control and manipulations of the finances so as to hold a healthy competition in the global market. Bearing in mind the alluded rationale of Apple Inc., this played a key part in the success of the company in the market and the differentiation of its products from the rest of the competitors within the same niche (Panayides 2017, p. 44). The strategic restructure of the organizational culture has been the epitome of the self-motivated staff members, who have spearheaded the desirable outcome and the set objectives of the company.

How Apple Establishes Close Coordination Across the World

Apple is a successful organization in the world that has outdone several companies in the same field or with similar products as Apple’s. Apple runs a global supply chain by the purchase of materials and components to its suppliers before manufacturing the final product and releasing it in the market. The main supplier of the materials and components in China, where the organization assembles its products. The materials are then assembled and shipped to the market directly, who can purchase the products online from the company’s online store (Stadtler 2015, p. 12). The company has adopted other channels of distribution, such as retail and distributor stores for Apple dealers, with most of the stores spread across the world in more than 150 nations. The products are shipped from Elk Grove in California and set to the respective distribution points in the world (Manners-Bell 2017, p.88). After a product’s life comes to an end, the consumer may return the product back to the nearest recycling facility or store and gets a replacement at a discount.

The process of enhancement that was initiated by the company made Apple the leader in the global supply chain. Apple Inc. has made some critical steps in managing the global supply chain, which includes the involvement of suppliers. Apple has created a formal list of the expectations of the suppliers and acted fast on the development exceptionality agreements that are focused on the trade for volume assurance (Blenko et al. 2016, p.9). The initiatives of the management on establishing a relationship with the suppliers have helped the company to achieve speedy scale operations in the international and local market and reaching the consumer demands. The company has partnered with other supply chains, which have helped in the establishment of new processes in manufacturing, with some of them being subject to the filed copyright of Apple Inc. Moreover, the company has utilized its full potential to ensure sufficient production capacity so as to reach the consumers’ expectations. This has been achieved by the launch of high capacity preorders from the suppliers. The initiative assists in reducing the competitors from acquiring access to the same manufacturing resources (Kim and Jun 2017, p.2388). Outsourcing has helped the Apple Inc. to gain a competitive advantage over the competitors in the market, and also facilitated the supply of its products to the potential customers.

How Distinctively Research and Development Helped Apple Inc.

Apple is pumping millions of monies into the research and development in the efforts to improve the products that have not meet the targets and objectives. The company intends to make all of its products generate equitable revenues, and thus the reason for investing in research and development. In the first quarter of the year 2016, Apple invested a massive $2.8 billion on research and development due to the nature of the highly differentiated products (Christopher 2016, p.36). It is normal for the company to increase its investment amounts due to the growth and development of the new products and the technologically intensive products. The annual spending of the company has risen above the $4 billion mark since 2014, making the significant bump. Some of the reasons for the drivers push behind the research and development include the growing range of products ranging from hardware to the finished products (Stadtler 2015, p. 18). The main hardware segments of Apple include the iPhone, Mac, Apple Watch, and iPad. The market for the four segments has been increasing and hence the need for research and development to differentiate the products.

Second, the growing service segment such as Apple care, licensing, Apple Pay and App Store, which are expected to grow and serve the customers better. the segments are also expected to make the company rise to a fortune 100 company. Apple has been developing services for other services like iCloud, Maps and Siri, for supporting this growth and the need for substantial investment.

The big focus on the in-house technological development needs to converge and Apple has been working to create a degree of difference from the rest of the products in the market and retain the proprietary information. The developers have directed the Research and Development spending in the in-house and initiating its own core technologies, such as processors and camera sensors for the new products, which are to be launched (Stephan 2017, p. 101). The hallmarks of the Silicon Valley companies are to increase the research and development, which will realize profits for the company through the differentiated products.

iPhone has been facing a slow down on the sales and other tribulations but the company invested $10 billion in 2017 with a target of increasing the sales by 30 percent. The online platform helps the customers have a direct interaction with the support team for all the queries (Gandomi and Haider 2015, p. 138). Due to a large number of suppliers and extensive market all over the world, the company uses teleconferencing to hold meetings. The process of teleconferencing has been fast, effective and cost-efficient, thus helping the company make critical decisions that affect the company and its impact its company success.

The investment in research and development is focused on customer experience. The management of the company uses several strategies of planning and decision making to improve the customer experience through the products they sell in the market. Some of the strategies include listening to the customer complaints about the products they produce and making them better. The investment in research and development has made customers feel curious as they expect better and differentiated products (Panayides 2017, p. 46). The sales and distribution team occasionally send product teasers and get the views from the customers so as to get their views on their expectations and derive the product satisfaction from the new products they put in the market.

At the moment Steve Jobs was the CEO of the company, the research and development team released a teaser iPad that had features that could replace a computer. The teaser product helped to obtain the views of the customers on the estimate they required to produce their first batch. The planning step of the Apple is aimed at building a strong vision for the company (Giannakis and Papadopoulos 2016, p.457). Apple has invested a lot of money in the research and development to facilitate them make decisions about the products they intend to release from the perspective of the customer’s opinions, which help to produce differentiated products. The strategy has worked for the company as it has helped to acquire customer satisfaction and in turn, the company has retained the current market and reached a broader base of the potential market. 

Supply Chain Risks and Associated Mitigation Strategy

Apple has penetrated into the major markets in the world, in every continent. The management has been highlighting the risks the organization has been facing in reaching the supply global supply. For instance, the sales and market share of Apple Inc. in most of the products did not reach the targets (Stephan 2017, p. 102). The company has been straggling to implement the standards of its culture in the supply chain and has not met its objectives due to the travesties that have continued to succumb the supply network. So as to be effective, Apple needs to apply stronger techniques when undertaking its functions (Kim and Jun 2017, p. 2388). The first step involves impacting the staff with the intellectual values and standards of the company. The use of series seminars and training from the principal company executives to the suppliers would help to resolve the challenge. The frontrunners can help to reteach the values that the organization views as key to its operations as a way of initiating a culture that will help the company move forward.

Second, the community does not perceive Apple Inc. as an impersonal corporation, and thus it has affected the supply chain performance. The community will play a critical role in safeguarding the future of the company and assisting in maintaining the value standards. The company needs to ascertain to the masses on the values of the corporation so as to improve the supply chain statistics (Ho, Zheng, Yildiz and Talluri 2015, p. 5038). Among the strategic ways of influencing the modification of the organization is to help the people have an incentive to change. The suppliers and marketing teams can induce rewards as a way of motivating the population. The rewards will cover the monetary as well as social elements to help in brand recognition as a way of influencing the society.

Since Apple is one of the leading companies in the electronics industry, it needs to fill the gap in the leadership structure, outline the mission and vision statement as well as the advertisement strategies. The improvement in the named areas will help to improve the image and profile of the organization since they are the key elements to a successful supply chain in the global market (Blenko et al. 2016, p.11). Moreover, the company should upgrade the culture of the staff so as to fit the criteria of the company. The current leadership structure and advertisement strategies are expensive and pose the risk of slip-ups and also need to focus more on the contented staff members. The leadership of the company needs to lead in the culture of responsibility and take on board all the executives in the various arms of the firm in assimilating the significant players. All in all, the team needs to show the workforce how imperative the work is. The administrator can countersign the environment on the standards and commendations so as to voluntarily allow the transformation (Hill, Jones and Schilling 2014, 74). The senior managers in the various branches spread across the world need to be committed as a prerequisite of the transformation as well as understand the impact of having a resilient culture on the corporation. If Apple illustrates the examples of establishment that is turned in the opposite directions of the company’s strategies, it may need to acknowledge the impact of the culture that will influence the supply chain of the firm.

Big Data Analytics Tools in Reducing the Costs and Customer Service Improvement

Among the challenges that Apple is facing is outsourcing, since it leaves the company prone to the disruptions in the major links in the supply chain of the organization. The challenge is most probably caused by various factors ranging from the global trade agreements to the occurrence of the external factors in business. Moreover, the working conditions of the suppliers also raise a concern from the warehouses to the factories (Blenko et al. 2016, p.11). Apple has handled the challenge of technology amicably and has helped the company rise above the expected levels due to elements such as research and development, which has facilitated the advancement in technology in the production of its products. The company has been in global leadership due to the technologically differentiated products, that has helped the company cope up with the competition in the market (Christopher 2016, p. 37). The products such as Mac, iPhone, and the IOS operating systems have adopted the latest technology, a strategy that Apple has used to gain a competitive advantage in the global market.

The price of the products starting from IOS Direct Sourcing program has been high and have helped to sustain the current growth rate. The goodwill of the company has attained a niche in the market and has made the brand recognized globally (Stadtler 2015, p. 24). The position of the company has helped it to generate high profits due to an established supply chain network spread across strategic places in the potential market. Apple has a proficient assimilation of the suppliers, manufacturing, warehousing, and distribution of supplies as the major strengths, which have helped the company scale up and succeed in the supply chain (Carbonara and Pellegrino 2017, p. 358).

Stating the right price for products is an important aspect of attracting customers. Apple has focused its energies on setting the price that will help customers get the value of the products they purchase and also help the company make a profit at the same time. The investment in technology has helped to reduce the costs incurred in the production process. Apple has adopted the lean manufacturing strategy to enable it to meet the global product demand and also increase the efficiency of the production process (Giannakis and Papadopoulos 2016, p. 462). The company has also made strategies for visualizing the delivery routes in the logistics management. The strategy is aimed at minimizing the distribution costs and ensure efficiency in the marketing network (Gandomi and Haider 2015, p. 142). The company logo has earmarked the marketing routes and has made Apple products known to the customers even without reading the production company. The service is aimed at ensuring customer satisfaction as one of the most important elements in reaching a wider customer base.

Conclusion

The supply management of Apple Inc. is developed as a strategic move that can handle the supplies and sales. Apple has differentiated its products with the use of the latest technology, which has helped the organization attain a competitive advantage over the competitors. The company has invested its funds in research and development to ensure the products meet generated enough profits as well as reach the objectives set in the market. Among the risks that Apple faces in the supply chain development include the leadership structure, outlining of the vision and the mission, advertisement strategies among other factors that affect the image and profile of the organization. The culture in the staffing roles also needs to improve to help the company grow and improve the standards that suit the company. Apple has utilized outsourcing strategies starting from the manufacturing section to the supplies made in more than 150 nations in the world. The materials and components of manufacturing are supplied from China and assembled before being released to the market. The company works to ensure customer satisfaction in order to maintain its current customer base and expand to other areas. Apple is a leader in the market and hence requires to maintain its position in price and ensure the current position is sustainable.

References

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