Advantages And Disadvantages Of Apple Supply Chain

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Executive Summary

Apple is an American global innovation organization, headquartered in Cupertino, California, which designs, builds and markets mobile phones, hardware, computer programming, and online administration. They are the leading mobile phone manufacturer in the world and generated sales of $ 229.234 billion in 2017. According to Haslam et al. (2013) On the extraordinary initiative of the late Steve Jobs, the Apple brand has been effectively restored and is clearly the most inventive organization in the world with a trusted customer base dedicated to the brand. Tim Cook joined Apple in 1998, shortly after Steve Jobs re-established the organization and turned Apple’s chaotic activities into a global online inventory. He was appointed as CEO in 2005 and was chosen by Jobs as CEO in 2011. Cook is a very famous supply chain expert who is credited with optimizing Apple’s network, making it the most extraordinary network in the planet’s supply chain. Today, Apple Inc. Apple sells its products through retail stores, online stores, direct action, wholesalers and retailers. They also sell software applications and applications through the iTunes Store, iBooks Store, and Mac App Store. In this report, we will discuss Apple’s global supply chain network and discuss key segments and how they became the global pioneers of the supply network. This report also explains how Apple products are bought, shipped, assembled, distributed and sold in various parts of the world. In this report, we talk about the pros and cons of global supply chains like Apple.

Introduction

From 2010 to 2013, Apple’s supply chain will be ranked number 1 in the world by research firm Gartner. In 2014, Gartner placed Apple in a different class of superior to demonstrate sustainable leadership in the supply chain and characterize the thinking of ‘solutions’ for inventory networks, innovative new ways with search engine capacities. Apple uses best practices in the global supply chain network to ensure that the business runs well. Apple Inc. is a global leader in branding, customer service, innovation, and the software ecosystem. Apple items contain vital components that are shipped regularly by the manufacturer. Because cellular companies often use the same components, important parts of distant and well-known suppliers often run out of stock due to strong demand. To address this shipping problem, part of Apple’s procurement strategy is to pre-purchase supplier production capacity to ensure consistent supply of critical parts. This shows us how Apple has outperformed its competitors. Apple is interested in attracting customers from various groups and innovating products that fascinate them. Some of their products are:

  • iPod: iPod was created to target teens, preteens or people who wanted to listen music on the go.
  • iPhone: iPhone was introduced for targeted customers who were business men and adults who needed applications or Siri to schedule their meetings or be productive while they work.
  • iPad: iPad is a mixture of iPod and iPhone with a larger screen. iPad have a larger battery screen, Big screen, More applications, Faster internet.
  • MacBook: The target customers for MacBook were business employees who needed easy interface, High speed, Slim appearance and large memory compatibility.

Apple’s Supply Chain

Apple’s supply chain has been similar to the others, but they use different suppliers and have distinct evaluation approaches according to the publication of Benjabutr (2020). The Supply Chain Map is the best reach for communicating a large framework from the start to the end of the activity. Data from the yearly report is likewise used to produce the supply chain map. To take a closer look at their supply chain we use supply chain map.

SOURCING

Apple collects raw materials from different sources and has different segment suppliers. They only have a small number of organizations that supply them with components, and they are located in various parts of the world. Apple, unlike its opponents, has a small share turnover when they give up their shares. It is possible to save as little inventory as possible. Why Because prices tend to be about bearings and competitors. Mobile phone manufacturers cannot store large quantities of goods in inventory because unexpected measurements from competitors or other developments can cause significant changes and can suddenly reduce the value of goods in inventory. Apple manufactures products and components from countries such as the United States, China, India, Europe and other Asian countries.

MANUFACTURING

According to Pino (2020) extensive analysis the New York Times published a useful report that provided interviews with sluggish former Apple employees. The purpose of the movement itself is very clear that the iPhone is not manufactured in America because it literally can’t. In particular, there isn’t enough labor to assemble Apple products. Manufacturing in China is cheaper than manufacturing in various countries. The factory in China, where Apple products pass final assembly, employs around 230,000 people. In the United States, there are 83 metropolitan areas with inhabitants similar to the number of labours in manufacturing facilities at present. This means that the number of potential workers in the US is not enough to meet Apple’s requirements. In terms of outsourcing and installation, production in America is more expensive. This is because workers have to pay more. Because the company must generate revenue, the related costs can inevitably be transferred to buyers with the cost of goods increasing. In conditions that are less difficult, this means that Apple-made products cost more.

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WAREHOUSING

Assembler sends products directly to buyers with UPS / FedEx for people who shop at the Apple Online Store. For other distribution channels, such as retail stores, direct stores, and various retailers, Apple Inc. will store goods in Elk Woods, California, where the central warehouse and call centres are located, and will begin shipping products from that point.

DISTRIBUTION

Apple’s action plan is used both directly and indirectly. Apple sells its products directly through its Apple store. This is very important for Apple’s performance because it allows customers to get the best experience. For this reason, Apple continues to expand its business throughout the world. It is also very expensive. However, Apple has full authority over customer experience and power over shipping methods requires enormous resources. With this method, Apple can hire experienced managers and experienced employees who are ready to offer a broad commitment to external devices, programming, and various beauties to complement Apple’s products. For this reason, Apple continues to expand its business around the world.

RETURN

Toward the finish off a products life, a customer can send items back to the closest Apple Stores or committed reusing offices. As a matter of fact, Apple attempts to follow the lean manufacturing concept. By using this concept apple uses components of older devices which help in reducing new product cost and reduce pollution and greenhouse gasses.

ADVANTAGES OF APPLE’S SUPPLY CHAIN

According to Maziliauskaite web post (2020) some of the advantages are:

  • Focused supply chain: One thing that distinguishes Apple’s inventory from other innovation manufacturers is the way Apple only offers a small number of items. It takes extraordinary courage to make unusual decisions, but Apple is an organization known for it. Apple currently only makes 5 unique items, each with 15 full variations. The small product range shares many regular parts, which takes into account the extraordinary accuracy and improvement of the existing network. However, this system is not suitable for all organizations. It is important to assess the business in which the company operates, its market position, financial capabilities, and the quality of its image.
  • Strategic Suppliers: Now, conquering Apple suppliers is an important secrecy that they still have. However, in 2012 Apple released a list of its suppliers to make the manufacturing network clearer. Apple is currently posting an update that is repeatedly being updated on its official website. According to Apple, around 156 suppliers on stage make at least 97 percent of the use of manufacturing, assembly and assembly materials. The use of several suppliers and producers also has favourable circumstances. The small number of suppliers is very easy to manage compared to their opponents, who have more suppliers. Apple can build limited relationships that are increasingly meaningful and reasonable. This also affects the cost of Apple’s organization, because the organization provides a large number of components and purchased material.
  • Control on Their Suppliers: Another important part of the board’s addictive and experienced inventory chain is being supervised by the board. Without it, the image of the organization can be seriously damaged. Apple has also created suppliers a set of accepted rules that, along with their supplier engagement, are designed to ensure that suppliers comply with Apple’s standards and quality. Another confirmation of the Apple Inventory Network’s tight control is the way in which requests at Apple stores are constantly checked and the production network can balance if necessary.

DISADVANTAGES OF APPLE’S SUPPLY CHAIN

  • DELIVERY GLITCHES: One of Apple’s biggest iPhone supplier has recently announced that it will send significantly less shipments to the new iPhone than the organization previously mentioned. Hon Hai Accuracy Industry Co. Provider Some quality standards were not met at the time of writing, which prevented organizations from porting many iPhone devices to customers around the world. Quality problems are identified in the manufacturing gap related to design, which can be overcome or reduced by an adequate branch network created through agreements on board.
  • GLOBAL PANDEMIC: The current situation is worse for apple as COVID-19 have hit major markets of the world. Apple’s major supplier and manufacturing plat is present in China which was the epicentre of COVID-19 virus which was hit badly as they we closed and the country was placed in lockdown. The drop in Apple’s stock is set to wipe about $30 billion off its market capitalization, similarly as it was crawling nearer to $1.5 trillion in esteem. The stock was exchanging down at $318.74.
  • LABOUR EXPLOITATION: According to Ngai et al. in 2016 many workers were attempting suicide in 2010 at FOXCONN who is the key supplier of components to Apple. This posed a huge threat to Apple’s image and caused major delays in production. Labour strikes also caused major
  • COPYRIGHT ISSUES: Apple products are copied worldwide as their features are very good. Many small phone makers copy their design and features and sell their product at very cheaper prices. These issues cause apple to file lawsuit against different companies.

CONCLUSION

The analysis of Apple’s procedures, testing issues, and complexities show that the achievement of its production network tasks relies upon how well they deal with their supplier. This involves early supplier inclusion for new product development, good communication, and supplier improvement or assessment. Apple’s production network works so well since it’s been based on long haul connections that work for both Apple and its providers. One of the apples key supplier is Samsung who is likewise an opponent of Apple. Yet, apple is ahead in rivalry with Samsung, this present how’s that Apple have close control on their supplier. By and large, Tim Cook has regulated an improvement in Apple’s production network which has seen it become as proficient as it’s at any point been. After evaluating this report, we can say that Apple Inc is named as ‘King of Procurement’. However, if they treat their labour well and restrict their suppliers on exploiting their man power they can eliminate the major delays. Delivery glitches can also be reduced if communication with their suppliers is improved.

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Advantages And Disadvantages Of Apple Supply Chain. (2021, September 22). Edubirdie. Retrieved May 20, 2022, from https://edubirdie.com/examples/advantages-and-disadvantages-of-apple-supply-chain/
“Advantages And Disadvantages Of Apple Supply Chain.” Edubirdie, 22 Sept. 2021, edubirdie.com/examples/advantages-and-disadvantages-of-apple-supply-chain/
Advantages And Disadvantages Of Apple Supply Chain. [online]. Available at: <https://edubirdie.com/examples/advantages-and-disadvantages-of-apple-supply-chain/> [Accessed 20 May 2022].
Advantages And Disadvantages Of Apple Supply Chain [Internet]. Edubirdie. 2021 Sept 22 [cited 2022 May 20]. Available from: https://edubirdie.com/examples/advantages-and-disadvantages-of-apple-supply-chain/
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