Report on Supply Chain Management of Apple Inc.

Test-marketing method is utilized by Apple Inc. for forecasting the demand for its products. The company utilizes this strategy for preceding the national introduction of a new product or version. It helps in experimenting the market, measures the awareness of product, and market penetration. It also assists in tuning the common program of marketing and making sure that no issues or troubles has been ignored. Being the most accomplished and admired phone-maker in the globe, a huge demand is created by it from the admirers for its products. Huge demand for its products serves to increase the supply that the organization can make sure of to its customers. The economy of United States is mostly reliant on the manner in which the spending of consumers is carried out. Better utilization of the strategy of demand forecasting has allowed the organization to develop opportunities of employment for over 500,000 individuals in the nation. Moreover, this figure includes forty-seven thousand workers who work at the company and twenty-thousand individuals who depend on the economy of Apple. The sale of products of Apple has the capability of increasing the share prices, supply chain, and customer expenditure as well (Satariano and Burrows, 2011).

Apple is actually one of the most competent inventory management companies in the whole world. Its strategy of inventory management assists the organization in knowing the market’s best section where it must be selling its products. The strategy of inventory management implemented by the company had led it to acquire high increments in business ratings, returns, incomes, and sales. In addition, the organization is capable of selling the products at the right prices for only the profitable segment of market. Using this strategy, the company is also able to determine the segment of market which pays higher for a certain product of the company. The strategy of inventory management has allowed Apple to ignore the prospective purchasers who don’t wish to pay the right price for a product (Lu, 2014)

Procurement Apple Supply Chain Management

It is the requirement of Apple that its suppliers must meet the highest standards in terms of quality for all services and goods. The requirements of company include a commitment to assurance of caliber. Additionally, it is significant for the suppliers to be committed for ensuring social responsibility’s highest standard. For the company, the ideal suppliers are the ones who understand the expectations and culture of the company. Those suppliers are valued by the company who invest their time in learning about and understanding the business of company. If the business environment of Apple is to be analyzed, it is not only fast-paced but also competitive. This dynamic has to be understood by every supplier of the organization and must be flexible or agile in responding to all the changes (Kumar, Teichman and Timpernagel, 2012).

The environment and social responsibility is taken seriously by Apple and a good example is the commitment to a diverse base of suppliers. This program was established formally in 1993 and ever since that, the organization has continued to support and grow the suppliers who participate in the process (Apple Inc, 2019)

Production of Goods in Apple Inc.

The process of product development of Apple might be one of the most successful processes even utilized and implemented. With the organization aiming to be the first trillion dollar organization, there is actually a lot that designers can learn from the organization and use a similar strategy. Apple is quite a secretive organization and in the time of Steve Jobs, it would not be possible to find out the business’s internal workings. This is not surprising when the market advantage of a business is its design approach. It is worth to keep it behind the curtain. When a team of design experts work on a product, they often work individually and don’t get involved with the remaining business. They might apply physical controls for preventing the team from communicating with other employees of the company. In addition, the team is even removed from the hierarchy of Apple at this point (PANZARINO, 2012)

Monday meetings are held by the executive team for examining products that the organization has in the phase of design. The process of production is quite time-consuming because the organization doesn’t work on different models at the same time. Rather than that, resources are focused on some specific products which are predicted to return to the company as well. It means that every single product of Apple is inspected by the team once a fortnight. This helps the company in preventing delays (Håkansson and Persson, 2004). It is a fact that iPhone is the most famous and renowned product in the world, so it is important to know that how iPhone is produced. Let’s take an example of iPhone 6, whose design and development was done in the United States, as it is the norm that design and development of iPhone is done in United States. Then its sourcing as well as manufacturing is done in China. The company manufactures iPhone outside Asia for various reasons such as lower costs as well as to deal with any supply chain risk (MH&L, 2014)

Transportation of Goods in Apple Inc.

Apple Inc. works to the lock the supply of custom components with some specific exclusivity agreements. This actually serves to save the uniqueness that it has built along with its products. In some of the cases, Apple seems to invest in the capital equipment for making special components (product equipment is lent by the organization to its partner of manufacturing). At times, this machinery of production become exclusive to Apple either because of the agreements of exclusivity or because of the fact that Apple as a company is so large that a backlog becomes very long for an equipment (PANZARINO, 2012)

it is important to look at the last portion of the supply chain process, which is transportation and distribution of Apple iPhone through various distribution channels. It was mentioned earlier that iPhone is manufactured in China, and once its manufacturing is done, then it is transported to United States. The company has its warehouses in United States to stock its manufactured iPhones, and then these iPhones are distributed to not only U.S distribution channels for customers, but global distribution of iPhone is also done from United States. It means that iPhone is distributed to its end customers through U.S. The number of suppliers as well as locations is many for iPhone like in China; the company has 349 suppliers, whereas suppliers in United States are 60. The second most number of suppliers for Apple is in Japan, where it has 139 suppliers (MH&L, 2014)

References of Apple Supply Chain Management

Apple Inc (2019) Apple and Procurement, [Online], Available: https://www.apple.com/procurement/ [15 May 2019].

Håkansson, H. and Persson, G. (2004) 'Supply chain management: the logic of supply chains and networks.', The international journal of logistics management , vol. 15, no. 1, pp. 11-26.

Kumar, S., Teichman, S. and Timpernagel, a.T. (2012) 'A green supply chain is a requirement for profitability.', International Journal of Production Research , vol. 50, no. 5, pp. 1278-1296.

Lu, C. (2014) Apple Supply Chain - The Best Supply Chain in the World, [Online], Available: 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 [15 May 2019].

MH&L (2014) The iPhone 6 Supply Chain Saga [INFOGRAPHIC], [Online], Available: https://www.mhlnews.com/global-supply-chain/iphone-6-supply-chain-saga-infographic [15 May 2019].

PANZARINO, M. (2012) This is how Apple’s top secret product development process works, [Online], Available: https://thenextweb.com/apple/2012/01/24/this-is-how-apples-top-secret-product-development-process-works/ [15 May 2019].

Satariano, A. and Burrows, P. (2011) 'Apple’s supply-chain secret? Hoard lasers', Technology , vol. 4, no. 50.