Apple’s supply chain is one of the best in the world in terms of value delivery. First, Apple’s top management believes in using the most efficient logistics that delivers the company’s commodities within the shortest time possible. Tim Cook, the current chief executive officer of Apple believes that electronic devices should be handled like fresh produce (Lu, 2020). This approach to supply management has enabled Apple to ensure that its customers and all other stakeholders get the expected value from the company’s products. The prompt, efficient, and effectively supply chain ensures that the smartphones, tablets, and other commodities manufactured by Apple do not lose a lot of value and quality along the supply chain. This is because electronic devices usually lose at least 1% of their value every week (Lu, 2020). In this regard, having an effective supply chain ensures that consumers get high quality products while the company loses minimal revenue through depreciation of commodities.
Apple’s approach to product assembling also contributes to optimal value delivery for the company’s supply chain. Apple sources raw materials from different suppliers and ships them to China where assembling is done. The company then delivers the products to customers from different parts of the world. This approach delivers a lot of value because Apple can hold as little inventory as possible while satisfying the demand in the market. Apart from incurring little warehousing and storage costs, apple’s approach to inventory management also reduces wastages and revenue losses associated with stocking inventories for too long. For instance, damages and breakages of the company’s electronic inventories are significantly reduced through such supply chain management approach.
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The Impact of Service, Logistics, and Distribution on Supply Chain in General
The kind of service and logistics that a company chooses usually has significant impact on its supply chain management as well as overall revenues. This is because a company’s logistics has significant impact on the level of customer satisfaction as well as the quality of products (Gong, 2013). Additionally, the kind of service, logistic, and distribution strategies employed by a company determines the level of efficiency of the supply chain (Gong, 2013). This means that a distribution and logistics system with poor coordination and partnership between the different players will usually result to poor performance of the entire supply chain.
The Impact of Service, Logistics, and Apple’s Supply Chain
Generally, Apple’s strategic service, logistics, and supply chain has generated positive impact on the company’s business fortunes. The use of technology to support the distribution of Apple’s products to consumers has led to efficiency and cost reduction. The online engagement has enabled Apple’s customers to receive their orders most efficiently without the company incurring a lot of costs. Additionally, as Dudovskiy (2019) observes, Apple collaborates with several suppliers from different parts of the world, a strategy that has enabled the company to improve its logistics management over the years. Apple also encourages constructive competition among its suppliers. This has enabled the company to get the most from its suppliers by dropping the poor performers and retaining those that bring optimal value to the company. The high number of suppliers and Apple’s exemplary brand as a world leader in as a manufacturer of electronic devices has also enabled the company to develop and execute significant bargaining power over its suppliers (Dudovskiy, 2019). This bargaining power leads to more efficiency and reduced costs, which trickle down to what consumers finally get. Consequently, consumers can benefit from such massive bargaining power through reduced prices and timely delivery of orders made by consumers (Gong, 2013). Additionally, the large-scale nature of Apple’s logistics has enabled the company to benefit from economies of scale. Again, this has contributed to reduced costs, lower prices for consumers, and timely delivery of products and services.
Finally, objective outsourcing of manufacturing locations has also enabled Apple to balance between pushing down operation and logistic costs with high-end customer service. Except for a few models of Mac computers which are manufactured in the United States and Ireland, Apple assembles most of its products in Asia where production costs are low (Dudovskiy, 2019). This strategy has delivered value, efficiency, and satisfaction to the company, consumers, and other business stakeholders.
Strategies for optimizing Apple’s global operation architecture for scale, access, flexibility, and risk mitigation
There are various strategies that Apple could use to improve its global operation in terms of scale, flexibility, access, and risk mitigation. Primarily, Apple should scale up its online logistic and distribution channels. Currently, more consumers prefer to utilize modern internet technologies to order for goods and to interact with vendors (Gong, 2013). This means that Apple should continue to utilize the online business strategies to improve the value the company gets from its suppliers and other business partners. Additionally, Apple should continue to make use of social media and other online engagement platforms. Such platforms would enable Apple to interact more frequently with customers. Social media will make the company more accessible and also more flexible.
Also, Apple should open up more strategic assembling points in different parts of the world to enable the company to cut down on distribution costs. There are several countries in Africa and South America with low labor costs and favorable political environment (Gong, 2013). The company could add more assembling points in those regions. This would enable Apple to effectively supply its products to emerging untapped markets in African, South America, and some parts of Asia.
Additionally, Apple should continue to diversify its business in terms of products and markets. Such strategy would enable the company to minimize the risks associated with political, socioeconomic, and even cultural dynamics that could affect the company’s business fortunes ion the long run (Gong, 2013). In terms of products, Apple should continue to carry out research to ensure that it develops products which can meet the changing consumer needs and expectations. On the other hand, diversifying markets would solve both logistic and risk challenges while also making the company’s business more sustainable in the long run.
References
Dudovskiy, J. (2019). Apple Value Chain Analysis. Retrieved from https://research-methodology.net/apple-value-chain-analysis/
Gong, Y. (2013). Global operations strategy: Fundamentals and practice . Berlin: Springer.
Lu, C. (2020). Apple supply chain – The best supply chain in the world. Retrieved from
https://www.tradegecko.com/blog/supply-chain-management/apple-the-best-supply-chain-in-the-world
