The iPhone X Supply Chain

iPhone X is one of the smartphones designed by the Apple company alongside iPhone 8 Plus and iPhone 8. Apple company embraces and invests in the supply chain to attain competitive advantage. The assessment of the iPhone X present-day supply chain and logistics scenario is critical in determining the function of the supply chain process and the most preferable modes of transporting smartphones overseas (Durach, Wieland & Machuca, 2015, p. 956). Additionally, it helps one to comprehend where the distribution warehouses are supposed to be located and their role in the supply chain. The use of technology in the iPhone X supply chain is critical in increasing the control over production and effectiveness in the delivery and tracking of the order Durach, Wieland & Machuca, 2015, p. 957). However, there are some risks such as performance, strategy and market risk. This essay presents a comprehensive discussion on the modern-day supply chain scenario grounded on iPhone X mobile phone brand.

Physical Flow

To manufacture iPhone X, the Apple Inc. procures most the phone’s components – like the camera module, touch-screen controller, the microphone, the modem and memory chip – from more than 200 suppliers across the globe. One of the major distributors of the smaller parts of the phones like metal casing is known as Foxconn, an enterprise located in Taiwan – it operates a Zhengzhou facility (Barboza, 2018, n.p.). The Apple Inc. orders many other constituents of iPhone X from international suppliers and then ships the materials to its contract manufacturers such as Foxconn in China. The Foxconn facilities have more than 350, 000 employees who are involved in the F.A.T.P – ‘final, assembly, testing and packaging’ (Barboza, 2018, n.p.) The manufacturing company has 94 production lines which have approximately 400 steps which are involved in assembling the iPhone X. This encompasses soldering, polishing, drilling as well as fitting screws. The facility manufactures about 500, 000 brands of iPhone X in a day (Barboza, 2018, n.p.). When the iPhone X comes out of the assembly line, it is put in a sleek white fibre box, packaged and placed on a pallet made of wood, and then dispatched to the waiting trucks.

The iPhone X mobile brands which are bound for the United Kingdom leave the customs via trucks by either the FedEx or UPS freight carriers to the Zhengzhou airport where they are flown to the airport in the United Kingdom. UPS has sited a high technology facility known as DP World London Gateway which is one of the biggest organization’s infrastructure investment in the United Kingdom (London Gateway Logistics Park, 2017, n.p.). The phones are shipped to some of the major retailers such as Amazon. The customers can get the products at their place of residence by placing an order online after which the seller distributes the product to them Durach, Wieland & Machuca, 2015, p. 956). The Apple company wholesaler in the U.K. uses reverse logistics to apply proper disposal of the products, refurbish used merchandises and retrieve some of the parts of the phones (Smith, 2015, n.p.). The company give the members of the supply chain a chance to get a return form the end-product that have been sold. The Apple company purchases used iPhone X brands and send them to the manufacturers to retrieve the useful parts. Regarding defects and recalls, the customer has the opportunity to return products that have safety issues or defects and are given other brands.

Information Flow

The supply chain of iPhone x entails a wide range of different information – description and pricing, customer and order information, bill of materials, product data, and delivery scheduling commercial documents, information regarding the vendor and distributor, contemporary cash flow among others (Bsaikrishna, 2016, n.p.). As such, it demands much communications and cooperation with the subcontractors, transportation vendors, suppliers and other participants. The flow of information within the supply chain can thus be bidirectional (Bsaikrishna, 2016, n.p.). The quick and more efficient flow of information improves the effectiveness of the iPhone X supply chain. Finally, IT significantly transforms the performance (Bsaikrishna, 2016, n.p.).

The function of Different Modes of Transport in the Supply Chain

To practice an efficient and cost-effective logistics management, the Apple company lays a framework for an economical and responsive transportation network. In this way, it implements the principal strategic transformations to increase the level of customer service and decrease costs with minimal disruption in the entire supply chain flow.

Air Freight Logistics

The Apple company requires the air freight logistics to effectively complete its functions and supply chain. The Airfreight logistics provides the company with a rapid delivery of raw material to the manufacturing site and already made iPhone X to the warehouses which are overseas (Barnes, 2014, n.p.). Additionally, it offers flexibility, security, accessibility, lower risk of damage as well as the good frequency for the regular destinations. There are approximately 200 trusted suppliers who provide Apple Inc. with the necessary materials for making iPhone X and other products (Barnes, 2014, n.p.).  The invention of iPhone X massively boosted the air cargo capacity and in holidays the distribution via the air increases by 20 per cent. The entire process commences in China where pallets of iPhone X are moved from the factory in containers that have security details. The containers are loaded into the trucks which are then shipped through an already booked air freight space (Barnes, 2014, n.p.).  The journey usually ends in the warehouses where the wholesalers and retailers make consistent adjustment according to the demand. FedEx company is the main distributor of iPhone X.

Road Freight Transport

            It is the main transport network for Apple company. The raw materials and usually transported to and from the airport to the factory where manufacturing, assembling and packaging occurs. After that, the already packaged iPhone X is then shipped to the airport using the FedEx trucks (Barnes, 2014, n.p.).  After reaching the United Kingdom by air, the already manufactured phones are distributed to the wholesalers across the U.K. using the FedEx trucks. It is also worth noting that this is the main delivery system from the store to the customer. Road transport is also significant in reverse logistics (Barnes, 2014, n.p.).  It is used by the Apple company because of high accessibility and mobility, cheaper investment funds and high availability (Barnes, 2014, n.p.).  Therefore, road freight transportation of iPhone X is a crucial link within the supply chain.

Apple Express Delivery

 It provides the client with a strategic transportation and logistics services using the technology, processes and workforce skills. The high demand of time accuracy, the need to decrease the stock as well as the decentralization of production for iPhone X has contributed to the Just-In-Time (JIT) delivery standard (Barnes, 2014, n.p.).  JIT entails more frequent delivery of iPhone X at the right time and place - such as door-to-door services, traceability, efficiency as well as the increasing delivery demands.

Key Warehousing or Storage Points

Apple Regent Street, London is one of the most substantial shopping streets across the globe – and also the place where Apple firm launched its first retail warehouse in Europe. The contemporary warehouse is in the same building and has Grade II listed historic frontage currently reinstated and preserved (Morby, 2016, n.p.). The warehouse hosts the iPhone X geniuses – visitors can get assistance on how to set up their devices. Additionally, the deal with all product related queries. It also has a boardroom where the digital entrepreneurs and app developers among other start-ups are incorporated into the Apple family (Morby, 2016, n.p.). Another biggest warehouse is the Apple Victoria Square which has picked prestigious awards such as the Purple Apple Merit Award because of providing every shopper with an opportunity to enjoy an elevated shopping experience (Morby, 2016, n.p.). The primary role of these warehouses is that they are the main distribution centres for the iPhone X. They are distributed to the retail stores, online stores and direct sales force.

The Role of Technology in Supply Chain Management

The supply chain management has turned out to be a critical area of concern for most of the enterprises through a new generation of shopping alternatives such as Mobile Commerce and eCommerce. Technology has made it possible for manufacturing firms such as Apple – which mostly depends on the supply chain partners - to supply their merchandises like iPhone X. The functions of technology in the supply chain are discussed below

Increase in the Control Over Production

Utilization of technology within the supply chain provides improved accountability and visibility. As such, to bring effectiveness to the whole process of production, it is imperative for a manufacturing firm to have an apparent sight into the present stage of in-production commodities, predict any probable problem which is likely to occur and adjust the manufacturing schedules appropriately (Ghadge, Dani, & Kalawsky, 2012, p. 314). The use of technology introduces the needed transparency into the entire process. It enables the manufacturing corporations to effectively control the information and product flow across the supply chain.

Effectiveness in Tracking and Delivery of the Order

            Timely delivery is crucial in making certain that the customers are satisfied – higher customer satisfaction results in higher repeat business as well as customer retention (Monczka et al., 2015, p. 6). Technology plays a substantial role in increasing the delivery speed and keeping the client informed regarding the delivery schedule of the products. It also creates a platform where the customers are able to track their shipments which increases a sense of control and self-sufficiency. Equally, it transfers the customer service responsibilities to the customers which save money and time of the manufacturer (Monczka et al., 2015, p. 8). Other roles of technology include better management of inventory and increased collaboration amongst the supply chain partners.

Key improvement Areas

One of the key areas of improvement is the distribution network – it is the operational fulcrum in which the supply chain management is established. Distribution influences everything including the delivery tracking and the sales strategy and therefore it should be improved using a holistic approach or a cluster view (Golicic & Smith, 2013, p. 18).  It is important to always review the most important parts of the distribution network and develop ways in which they should work as a tandem. For example, the procurement software should work well with the delivery system – that is, it is supposed to communicate well with the production foreman and the warehouse manager (Golicic & Smith, 2013, p. 19). If this is not the case, areas of improvement should be pinpointed and changes made.

Key Areas of Risk in The Supply Chain and How to Mitigate Them

Some of the areas of risk in the supply chain include the market, inventory, and performance of the supplier among others.

Market Risk

 Market risk entails the compliance, brand, financial as well as the market exposure. During the outsourcing of the entire or part of the production lines – the firm is usually at the supplier’s mercy (Seldat, 2018, n.p.). If they fail to deliver parts of the product – the customers look into the company for an explanation. The mitigation approach involves identifying the quality standards of the product lines and pinpointing the potential implications of a compromise (Seldat, 2018, n.p.). As such, those lines are usually monitored closely to identify early warnings before problems wreak havoc in the company’s brand as well as the capacity to meet the compliance laws and the bottom line.

Strategy Risk

Selecting a supply chain strategy is very crucial. Comprehending what is right for a company may not be your right (Seldat, 2018, n.p.). Mitigating this risk involves defining the right up-front strategy and determining the right supplier using precise market intelligence to make the right decision and implement them.

Performance Risk

The suppliers are not only supervised to ensure quality standards, but they are also subjected to many changes which directly affect the supply chain (Seldat, 2018, n.p.). Performance issues, bankruptcies, labour strikes and ownership changes can turn out to be a major risk to the smooth operation of the enterprise supply chain. To mitigate the negative ramifications of this risk, the owner of a business has to constantly review every condition of the supplier and remain alert to the changes for the suppliers (Seldat, 2018, n.p.). The owner of a business proactively works to avert any domino effect within the supply chain.

Impact of the Supply Chain on the Environment and Suggested Improvements

The environmental implications from the supply chain include loss of biodiversity, water pollution, long-term damage to the ecosystem, toxic waste, greenhouse gas emissions, deforestation and hazardous air emissions (Christopher,2016, p. 35). Combining eco-friendly choices into the supply chain management can reduce the carbon footprint on the environment as a result of the emission of carbon from the factory and modes of transportation. Application of sustainability programs is therefore important to reduce the cost of production, unplanned activities, lessening the toxic waste and reducing miles (Christopher,2016, p. 36). Use of questionnaires and surveys to evaluate the greenhouse emission, waste generation and utilization of energy and water help in coming up with mitigation measures. Finally, going green is crucial as far as logistics are concerned.

Ways of Adding Value to the Supply Chain

First, a company has to be more flexible and controlled when dispensing services to the clients. This can be achieved by adding flexibility and control by offering “logistics menu cards” whereby the clients choose the mode of delivery as well as the price. Second, automation of the supply chain processes adds value to the product (Durach, Wieland & Machuca, 2015, p. 965). Automation helps in reducing labour costs. Additionally, it speeds up the reaction and delivery time (Durach, Wieland & Machuca, 2015, p. 965). Hence, teaming up with a suitable supply chain provider can help to streamline the various supply chain processes and make certain there is an improvement in process re-engineering, component procurement, evaluation of the supplier and packaging assessment (Christopher,2016, p. 9).  On the other hand, logistics can add value to the product by promoting quality customer service through timely delivery, agility in the operational shifts and enhancing optimization of costs via proper coordination of the planners and manager in the transportation and logistics management (Christopher,2016, p. 11).

Conclusion

In a nutshell, it is apparent from the above discussion that supply chain commences from the moment raw materials are taken to the manufacturing industry. Equally, logistics play a key role in the supply chain in that it is involved in the haulage of the raw materials and the finished products. The entire supply chain has many processes and only ends when the customer gets the final product. The main modes of transportation are air and land – road. Lastly, the ways in which logistics and supply chain adds value to the product include adding flexibility and control by offering ”logistics menu cards,” automation of the supply chain processes and timely delivery of the merchandises to the customer.

References

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