Apple Inc. has one of the leading supply chain strategies in the sales, development and the designing of consumer electronics such as the Ipad and the Iphone. The company designs, develops and distributes consumer electronics, online services and computer software to its target market. Apple currently employs over 115,000 full-time employees with permanent positions and has 478m retail stores in seventeen countries (Yan et al., 2016). Apple products are used by millions of people within the context of brand loyalty. The success of the operations in the supply chain management includes the close supply involvement in communication, performance reviews and the new product development. The most significant attribute to the supply design is the effective management of the supplier relationship.
The Apple Inc. uses the New Product Development process to ensure the acceleration of introduction of new products by securing the acquisition of licensing beforehand and the third party businesses, as supply management strategies (Hendricks & Singhal, 2012). The team makes pre-payments to suppliers in order to secure raw products before the launch of a new electronic consumable. Apple Inc. uses the inventory turnover to measure the sufficient use of financial resources to ensure increase in sales. The company uses trading partners to sustain their consistent and timely supply to various locations in the global market. The company also has various retail shops throughout the world and online availability of products to ensure that they meet demand in all their customers.
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Apple’s supply chain process map design
The high level supply chain process map design includes the breakdown of tasks into steps such as the initial startup, the concept testing, the pre-launch phase, the launch and the quarterly review phase (Haslam et al., 2013). At the start, the innovators deal with the creation and the development of new technologies. Apple then acquires the licensing of the new product as an intellectual property and then harnesses third party businesses. They conduct periodical market research and product testing to ensure that their products meet the consumer’s needs and preferences. The research team assembles the total cost data while the production department identifies potential defects of products during the research face so as to counter customer dissatisfaction and maintain a reputable facade.
In the prelaunch phase, the management deals with issues of ramp production and provides the required software for the new products. The supply team then acquires commitments of purchase of materials and provides the necessary inventory levels. The business analysts of the company then determine the quantity of launching the product before raising the orders and making pre-payment to suppliers. On the day of the launch, the management team resolves issues on backlogs and makes a one-hundred-and-fifty days for the forecast of the demand of the electronic consumable.
After the success of the launched product, the Apple team reviews the inventory level and adjusts the demand forecast based on the sales. This is the quarterly review phase where the delegated team checks the product life cycle status to ensure efficiency in the demand and supply circles. The innovative team checks the reviews and the customer attitudes and develops new updates for the product to keep the increase of demand. The sales team monitors the sales level and the amount of stock to evaluate the component cost trends.
Apple Inc. purchases raw materials from the United States of America, China, other Asian countries and Europe and then ships these materials to and assembles its products in China. Then they transport these goods to intermediate warehouses and main warehouses in California through UPS and FedEx. These products are then made available through online stores, retail shops, wholesalers, direct sales, networks and carriers. The products have a warranty return policy, trade-ins, and recycling or reusing programs.
Recommendations
Apple’s best practice in supply management includes the prepayment of possible raw materials to procure the goods before the launch of the company. A company can use this strategy so as to have the required materials to produce new products that meet the market’s demand. Prepayment ensures that the source sets aside enough materials requires and therefore provides the goods at an appropriate time to start production. It also nurtures a good relationship with the suppliers who are involved in the process of production and meeting demands of the customers.
The quarterly reviews of Apple Inc. enable the team to make rectifications on backlogs and defects of products. A company should have periodic reviews that measure the customer satisfaction base and has a research team that gets feedback so as to meet customer needs and specifications. The evaluation of products ensures that there is a steady demand and the modification of products increases customer loyalty. Brand loyalty is the ultimate success of any business because it increases the global competitiveness of a company’s product. The constant updates of products also create good reputation for companies therefore it is easier to secure the involvement of third party business and licensing of prelaunch of products.
Apple Inc. creates a good relationship with trading partners therefore increasing the chances of meeting delivery schedule and the financial stability of the company. A company should create a good relationship base with trading partners to avoid the delay of product delivery due to insufficiency in the supply of raw materials and the lack of intermediaries. The use of trading partners enables the company to expand to a global market through the setup of outlets that are accessible by overseas customers.
References
Haslam, C., Tsitsianis, N., Andersson, T., & Yin, Y. P. (2013, December). Apple's financial success: The precariousness of power exercised in global value chains. In Accounting Forum 37(4), 268-279). Elsevier.
Hendricks, K. B., & Singhal, V. R. (2012). Supply chain disruptions and corporate performance. In Supply Chain Disruptions , 1-19. London: .Springer
Yan, M. R., Chien, K. M., & Yang, T. N. (2016). Green Component Procurement Collaboration for Improving Supply Chain Management in the High Technology Industries: A Case Study from the Systems Perspective. Sustainability , 8 (2), 105.
