Apple Supply Chain: Planning, Challenges, Strategies And Contributions

Executive Summary

This report detailed examine of Apple Inc. in contest of managing strategy like how Apple company produce its products, from where they buy their raw materials, how their supply chain works, and finally what will be its sustainability in the future.

Introduction

Apple Inc., once in the past Apple Computer, Inc. was established by Steve Jobs, Steve Wozniak and Ronald Wayne on April 1, 1976. (Terrell E. 2008). By the mid-year of 1976, Ronald Wayne had left the organization however the two Steve’s continued on and propelled the Apple 1 computer. This was the first of many patterns setting items to be created and discharged by Apple over its presently close to multi-year history.

Jobs and Wozniak left Apple Inc. in 1985. Steve Jobs came back to his underlying foundations in 1997 and in the end, moved toward becoming CEO, assuming responsibility for the organization and bringing Apple over from close insolvency to productivity by 1998. Under the unbelievable administration of the late Steve Jobs, the Apple brand was effectively restored and is seemingly the most inventive organization on the planet today with a dependable client base committed to the brand.

Tim Cook joined Apple in 1998 soon after Steve Jobs re-appeared the organization, and changed Apple’s chaotic activities into a worldwide inventory network achievement. He promoted as Chief operations officer in 2005 and finally CEO in 2011. Cook is in incredibly famous store network master who is credited with streamlining Apple’s inventory network, making the most dominant production network on the planet.

Today Apple Inc. is a great example in advancement, item structure and improvement, marking, publicizing and programming conditions. Its main products are iPhone, iPad, iPod, Mac, Apple TV, and Apple Watch. Its organization includes an arrangement of programming applications, working frameworks, iCloud, embellishments, and service, and support offerings. Company uses various ways to sell their products. Some of these ways are through their retail locations, online, direct deals power, third-party cellular network carriers, wholesalers, and retailers. They also sell apps and other important applications for their phones, iPads and Mac like books, games and other paid apps through their iBook store, iTunes Store and Mac App Store.

Apple Inc. has developed throughout the years, from its modest beginnings of items being collected in Steve Jobs carport to the “World’s Most Valuable Brand”, worth $961.3 Billion today. (Forbes,2019). A year ago alone Apple achieved 261.7 Billion in income under Cook’s initiative. (Forbes,2019). Apple’s main achievement goes to Cook. He shapes this company network by redistributing assemble products.

Supply Chain

With regards to Apple’s Supply Chain Management (SCM) rehearses, there are clashing perspectives on their prosperity. Various people trust that its main reason to be on the top list is its production network, stock control and refining programs. It is clearly shown by the research of Gartner that Apple is heading number 1 position from last few Years. In 2014 Gartner set Apple in another bosses class for showing supported initiative in their store network and characterizing the very thought of an “answer” inventory network, pioneering new traits with its interest creation abilities.

Effortlessness is by all accounts powerful for Apple in a large number of ways than one. From their smooth logo, to their perfect item structure, to their motto “think extraordinary”, directly down to these rearranged inventory network arranging and the executives’ models.

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Supply Chain Planning

There are 5 departments of Apple supply chain planning which includes Research and Development, Concept testing, Pre-launch, Launch, Quarterly Review.

Supply network map is the best way to get more profit in a sufficient way. Data from previous years is used to create this Apple Supply Chain. Apple Inc. use to buy their raw material from various countries like Unites States, China, Europe, and other Asian Countries. Then they send all materials to China for assemble the products. After Assemble the products, they go to two different warehouses intermediate warehouse and warehouse in Elk Grove, California. From that point products goes to the different stores like online stores, retail stores, direct sales force and wholesalers and network carriers. After selling the products they go to warranty return department. They look after the faulty products and recycle them.

Challenges in Chain Supply

Apple Supply Chain has to face a lot of challenges to get success. There are numerous difficulties to survive, for instance;

• The overall economy of world can impact the company.
• Some re-vendors may likewise appropriate items from contending producers.
• Inventories can finish up obsolete anticipated solicitation.
• A few segments starting at now gotten from single or confined sources.
• Some custom segments are not normal to the rest of the endeavors.
• The capacity to acquire parts in adequate amounts is significant.
• Store network disturbance, for example, common and man-caused catastrophes to can be not kidding.
• The organization relies upon strategic administration given by redistributing accomplices.
• The organization additionally depends on its accomplices to hold fast to the provider set of accepted rules.

Key Factors Contributing to the Success of Apple’s Supply Chain

At the point when Tim Cook came locally available he understood Apple’s inventory network was excessively mind boggling. He rolled out intense improvements throughout the years to streamline the procedure, producing gigantic cost reserve funds and improving administration by:

• Concentrating on making extraordinary items utilizing weighty development.
• Providing items that are not regular and have an actual existence cycle of over a year.
• Diminishing the quantity of stockrooms to one brought together area in California.
• Synchronizing information between the focal distribution centre and its own stores and clients, making tasks increasingly productive and practical.
• Redistributing production and therefore diminishing the assembling process duration.
• Diminishing the quantity of key providers engaged with assembling, dispatching and putting away.
• Mentioning value decreases and requesting that providers move nearer to Apple’s industrial facilities.
• Decreasing the quantity of Sku’s to around 26,000, to improve and help progressively exact interest conjectures.
• Unprecedented stock administration.

“With regards to innovation, for example, cell phones, tables and PCs, stock belittles exceptionally, all around rapidly, losing 1-2% of value every week- inventory is fundamentally evil.” (Tim Cook, N.D.). On the off chance that it like you’re in the dairy business. A lot of Apple’s store network achievement can be credited to them proceeding to plan their items in California, while utilizing the lower cost of re-appropriating assembling to China.

Managing Strategies of Apple Supply Chain

Everyone knows that Apple Inc is famous for its structure, advancement and product quality. With regards to inventory the executives rehearses, numerous individuals trust that its store network model and refined programming framework are the unmistakable advantages that help them keep up market authority. Some of Managing strategies applied by Apple inc. are

1. Customers come First, Cost Cutting comes second – The reasoning of item improvement at Apple is to construct “madly extraordinary” items that client needs to purchase. Jobs sought after the separation procedure. Apple Company got a marvelous achievement when their entire production network took activities in state of harmony.
2. Set impossible Target – When Job concluded to make the iPhones to be scratchproof glasses, he went to Corning who made “Gorilla Glass” which was only a model in research and development lab. He set a very big target for the company to make new iphones with that glass. Employments unmistakably demonstrated that they needed a noteworthy shipment of Gorilla Glass within 6 months, which was beyond the capacity of Corning.
3. Prioritize Action – After jobs came back to Apple in 1997, there was a wide cluster of random product offerings. At that point, he reported that he required just 4 item classifications, in particular, “Shopper”, “Ace”, “work area” and “Versatile”. By dividing the items appropriately, Jobs diminished the intricacy of production network for sure and his group can organize the activities required to help the procedure.
4. Adopt Process View – A regular activity of company ensured that the show of chip down to the experience of obtaining things at its stores was associated together. To do this, Apple extended the internal combination by setting up mutual goal across specially units.
5. Simplify product and process- On Apple’s first promoting leaflet it was clearly said by Jobs that Straightforwardness is the key of Success. To make the company more reliable company will discard all the unnecessary segments. By do so there will be increase of stock and creation process will be smoother.
6. Make Radical change when necessary – The combination of iPod, iTunes and iTunes Store reformed the music business. In any case, Jobs was anxious about the possibility that somebody would include a music player the telephone’s handset; at that point, he chooses to suspend the offers of iPod and made the I Phone. Radical change or “Reengineering “might be essential if the outer powers are solid.
7. Enhance Relationship via Face-to-Face Meeting – Employments trusted the incredible thoughts couldn’t be grown exclusively by means of email. By doing this company will come to know about various thoughts of customers in terms of new Apple products which will help company to make the products according to the customers’ needs.

Sustainability throughout the value chain

Report comes after in excess of 1049 provider appraisals were led in 45 distinct nations, making a really worldwide image of Apple’s esteem chain (Benton D. 2019). It uncovered that 76% of Apple’s provider offices are viewed as high-performing, with just 1% viewed as low-performing. This concurs with a 30% expansion in high-performing providers’ year over year 2018.

Apple has consistently tested itself as one of the world’s driving innovation organization to extend its very own comprehension of its transcription and aptitude building openings inside its huge production network. 2018 speak to one of its most grounded years yet, as its providers accomplished UL Zero waste confirmation for all last get together test and bundling offices crosswise over I Phone, I Pad, Mac, Apple watch, Air Pods, and Home Pod. Apple’s providers moderated 7.6bn gallons of freshwater, and 100% of its last get together locales embraced more secure, greener cleaners in their assembling forms.

References

1. Benton Dale (March7, 2019), Supplier Responsibility Progress Report 2019: Sustainable Success for Apple. Retrieved from https://www.supplychaindigital.com/scm/supplier-responsibility-progress-report-2019-sustainable-success-apple
2. Black Kelly (2016), Apple’s Scores in Supply Chain Top 25. Retrieved from http://smbp.uwaterloo.ca/2015/06/apple-a-global-leader-in-supply-chain-management/
3. Forbes (2019), Apple. Retrieved from https://www.forbes.com/companies/apple/#724b2b2e5355
4. Forbes (2019), Apple. Retrieved from https://www.forbes.com/companies/apple/#724b2b2e5355
5. Supply Chain247 (N.d.), Supply Chain Model of Apple Inc. Retrieved from http://www.supplychain247.com/article/is_apples_supply_chain_really_the_no._1_a_case_study
6. Supply Chain 247(N.D.) Supply Chain Planning, Retrieved from http://www.supplychain247.com/article/is_apples_supply_chain_really_the_no._1_a_case_study
7. Terrell Ellen (April, 2008), Company History. Retrieved from https://www.loc.gov/rr/business/businesshistory/April/apple.html
8. Tim cook(n.d.), Apple Supply Chain- The Best Supply Chain in the World Retrieved from https://www.tradegecko.com/blog/apple-had-the-best-supply-chain-in-the-world-for-the-last-four-years-here-is-what-you-can-learn-from-it