Wednesday, October 2, 2013

Apple's Supply Chain Management

Apple has created a new market and changed the structures of music and mobile industries. Apple's iPad contributed to increase in purchase of digital albums. Until today, Apple's business goes well although there are competitors like Samsung. Speaking of Samsung, value propositions of Apple and Samsung is not the same. Although Apple and Samsung make smartphones, their philosophies and missions are in a different position. However, it is interesting that Apple keeps showing a good performance in terms of sales and improved brand loyalty. I asked myself, "What is the secret behind Apple's products."


Figure 1. Apple Supply Chain

The above figure is the supply chain of Apple. If you look at this, there is no big difference from other companies' supply chain process. However, successful companies make a difference by making impossible ideas possible. Firstly, I did research for Steve Jobs' thoughts for supply chain. One of the supply chain lessons from Steve Jobs is Customer comes first, cost cutting comes second. Steve believed that we need to make better products. As long as a new product has a strong value proposition and differentiation, delivering products to customers is not a problem. In addition, employees at Apple spend a lot of time with suppliers to produce accurately designed products as Apple intended.



Since Apple has retail stores, the company can make demand forecast easily. Thus, Apple is able to increase the inventory turnover by decreasing average inventory. If Apple keep more stocks, these are more likely to be obsolete or damaged. In addition,, Apple's product life cycle is longer than seasonal items so that Apple is not easily affected by seasonal factors. However, Apple takes a aggressive action during holidays. Since demand of products can increase rapidly during this period, Apple orders products by air instead of sea. This is because shipping products by ship takes a lot compared to air freight. In addition, Apple has a warehouse in California so that the company orders all products from the warehouse, resulted in simplified supply chain process. In other words, Apple retail stores act as a stocking point between upstream and downstream. Lastly, simplifying product process is a good strategy to eliminate unnecessary product lines. I think this is related to lean manufacturing. When Jobs returned to Apple in 1997, he chose only 4 product category so that it was able to decrease the complexity of supply chain.

sources:
http://www.supplychainopz.com/2013/08/7-supply-chain-lessons-apple-steve-jobs.html
http://www.supplychainopz.com/2013/01/is-apple-supply-chain-really-no-1-case.html

6 comments:

  1. This is a good article & good site.Thank you for sharing this article. It is help us following categorize:
    healthcare, e commerce, programming, multi platform,inventory management, cloud-based solutions, it consulting, retail, manufacturing, CRM, technology means, digital supply chain management, Delivering high-quality service for your business applications,
    Solutions for all Industries,packaged applications,business applications, Web services,
    Business intelligence, Business Development, Software Development etc.


    Our address:
    2002 Timberloch Place, Suite 200
    The Woodlands, TX 77380
    281-364-1799

    prologic-corp

    ReplyDelete
  2. That is an extremely smart written article. I will be sure to bookmark it and This article is efficient. Thank you for sharing it with us. I am visiting this blog on a daily basis and I am finding so much helpful article each time. Keep working on this and thank you once again...

    www.mixresult.com, a new-generation Mix education result news portal, publishes update result news from a highly interactive platform.

    www.mixresult.com

    ReplyDelete
  3. Thanks your blog is awesome.
    thanks for sharing information.
    Videocon Data plan
    Videocon Telecom invests approx Rs 130 Cr to upgrade its network to 2.75G EDGE, a 3G standard technology, to enhance Customer experience on data speed. Rolls out a full-fledged marketing campaign to get Customer attention.

    ReplyDelete
  4. Jayem Logistics, the best integrated supply chain player in India, offers all-inclusive services to better manage company assets.
    Top logistics service provider in India

    ReplyDelete
  5. Apple organization revealed a 13% fall in its one fourth of yearly income as product sales of iPhone smartphones dropped

    ReplyDelete
  6. Thanks for the post! For logistics management, visit http://orientfreight.com/.

    ReplyDelete

Note: Only a member of this blog may post a comment.