...Introduction Supply chain case study analysis covers a broad range of a company’s activities falling within a value chain. Each company has its own circumstances that lead to specific supply chain strategies and decisions. 1.1 Apple – Company Background Apple is a world leader in mobile, media and communication devices, PCs, Laptops and music players etc. Hardware is its primary business, however it also sells own and third party software applications and contents, peripherals, services, and networking solutions. The products and services of apple includes Apple TV, iPhone, iPad, iPod, Mac & their accessories, software solutions like iOS, Mac OS X, iTunes, iCloud and App Store and support services etc. 1.2 Timeline Apple Computer was started by two high-school friends, Steven Wozniak and Steve Jobs in 1976 with the introduction of Apple-I (Reuters, 2011). Apple-II which was the first colour graphics computer followed in 1977. Reason for its fame, Macintosh was launched in 1984. Jobs had to leave the company in 1985 due to internal power brawl. Apple introduced Powerbook-100 in 1991 and the first handheld device Newton Message Pad in 1993; however the financial position of Apple was extremely weak primarily due to competition from Microsoft. Amid the crisis, Jobs was brought back in 1997 as interim CEO. Jobs redefined strategic areas for Apple, scrapped some non-working products and focused only on a limited number of high potential products. This change in...
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...W14161 APPLE INC.: MANAGING A GLOBAL SUPPLY CHAIN 1 Ken Mark wrote this case under the supervision of Professor P. Fraser Johnson solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. op yo This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com. Copyright © 2014, Richard Ivey School of Business Foundation INTRODUCTION Version: 2014-06-12 tC Jessica Grant was an analyst with BXE Capital (BXE), a money management firm based in Toronto. 2 It was February 28, 2014, and Grant was discussing her U.S. equity mandate with BXE’s vice president, Phillip Duchene. Both Grant and Duchene were trying to identify what changes, if any, they should make to BXE’s portfolio. “Apple is investing in its next generation of products, potentially the first new major product lines since Tim Cook took over from Steve Jobs,” she said. Apple Inc...
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...Apple was founded in 1976 as a personal computer company (1). Since first introducing the Apple 1 computer kit, the company has revolutionized the marketplace for electronics. With 2012 revenues topping $156B (2), they are currently the 2nd most profitable company in the world (3). As their products become hotter with each new each new release, an increasing visibility and scrutiny regarding their manufacturing partners and supply chain has gained momentum. All too frequently, the company has responded to reports of questionable factory conditions and employee treatment with a promise of improvement. Apple’s supply chain has come under fire for what can be considered unethical treatment of workers across their extensive supplier network. Since the launch of their iPhone product line, Apple executives have continually proclaimed to their extended stakeholders that their supply network is thoroughly audited and inspected via their Supplier Responsibility Program. As Max H. Bazerman and Ann E. Tenbrunsel note, “When we fail to notice that a decision has an ethical component, we are able to behave unethically while maintaining a positive self-image. No wonder, then, that our research shows that people consistently believe themselves to be more ethical than they are” (4). Setting aside its own view, Apple must focus their efforts on the economic, legal, ethical, and philanthropic responsibilities of not only improving the environment at their suppliers, but also the slow developing...
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...Apple’s Supply Chain Management – An Overview Many supply chain professionals consider Apple’s supply chain to be the best in the world. But is that simply because Apple is among the most recognised brands in the world? For an objective analysis, a deeper look into the management and supply chain must be investigated thoroughly. However, in order to study Apple’s supply chain management, parameters on what a supply chain is must be set. Traditionally “Supply chain management (SCM) is the management of a network of interconnected businesses involved in the provision of product and service packages required by the end customers in a supply chain.” Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption. SCM works on three different levels, the strategic level, the tactical level and the operational level. All three are imperative for a company to function properly Apple is the best in the world at innovative product development. Because the company develops hardware, software, and associated digital services—rather than just focusing on one dimension—it can provide an unmatched user experience. This allows Apple to capture high margins from its products and services. But by many definitions alone, product development is not supply chain management; procurement, manufacturing, and logistics are. That said, Apple has a fascinating supply chain that is very different from...
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...Business Ethics Case Analysis: Apple Finds Human Rights Violation In Supply Chain. Using the 7-step model of Hartman & DesJardins, which helps examining the Impact of individual characteristics and organisational policies on ethical decisions. I will review an article written by the journalist Chilton Tippin on February 17, 2011, discussing the situation that many employees are experiencing, when working with organisations, where their moral rights are not met. According to the article, Surprisingly 8 months after the scandal suicides at Foxxcon’s Shenzhen factory in China, apple continues finding events where human rights are violated. For the first instance “Human rights violations”, would be the main ethical issue surrounding the case, “however”, I consider indispensable starting the research by firstly giving a clear definition on ethics and the importance of its application in business. Besides from identifying the problem of the case and knowing who is fighting against whom, an analysis of the stakeholders is going to be completed to understand what does the organisation mean for the stakeholder and vice versa. Next process would be weighing the options and finding the available alternative routes of action, while searching how they might affect the stakeholders, this with the use of ethical theories to support each of my arguments. Seek guidance would be the next process on the decision making model, which consist in identifying rules and norms setting initiatives on...
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...The Apple Supply Chain: The Best in the World? by Steve Banker July 2nd, 2012 Many supply chain professionals consider Apple’s supply chain to be the best in the world. I don’t. The reasoning appears to be that since Apple is one of the fastest growing and most profitable companies in the world, it must surely have one of the best supply chains too. This is a “halo effect” fallacy. Apple is the best in the world at innovative product development. Because the company develops hardware, software, and associated digital services—rather than just focusing on one dimension—it can provide an unmatched user experience. This allows Apple to capture high margins from its products and services. But by my definition, product development is not supply chain management; procurement, manufacturing, and logistics are. That said, Apple has a fascinating supply chain that is very different from traditional supply chains. This supply chain comes with pre-built advantages and disadvantages. On the advantage side, demand management is easier. Apple doesn’t have to get the demand forecast for a new product right. As long as it underestimates demand for a hot new product, Apple will have loyal customers clamoring for the new devices and willing to wait. In fact, the projected backlog leads customers to line up for hours before stores open to buy a new product. This helps to create marketing buzz. Because Apple has become so large, it has procurement advantages smaller rivals can’t match....
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...Suffolk University Thien Le Apple iPhone 6 & 6 Plus Managing for quality is one of the most important issues that a firm has to take care of to sustain and grow its business. The overall quality of products plays a big role in brand reputation and reliability as well as in the improvement of customer satisfaction. As a “big guy” in the manufacturing of electronic devices, Apple has separated itself from other players by creating a high quality standard derived from its brand positioning that is rooted in the company’s culture. Every product has to go through a whole set of processes to make sure that it meets the highest standard of quality. Even though they are mass-produced, its products are detailed in a way that makes them look like they are finely crafted. All the products are integrated to insure that they are easy to use with minimal after-sale support. To make those things possible, suppliers of Apple are carefully selected and tested to ensure that they are able to conform to the standards set up by the company. The quality of products is evaluated based on internal and external quality metrics such as level of customer satisfaction and design conformance. Below is the result of an official survey conducted in 2013 on smart phone customer satisfaction by manufacturer which Apple was on the top. Apart from product quality, Apple also focuses on service quality. It provides Apple users with advice and technical support through its physical and online infrastructure...
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... Understanding Apple Company’s value chain This main purpose for this article is to analyze Apple Company’s value chain. From this article, some professional knowledge about value chain in operation management can be learned. And the analyze will be deeply discussed in operation structure. In the textbook, operation structure is defined as the configurations of resources in the value chain including elements of suppliers, factories, distributors, sales offices, design and so on. (Collier and Evans, OM) The following articles will analyze specifically how these elements are operated in Apple Company from the view of Value chain style and value chain model. We can not deny that Apple Company is familiar with everybody in the modern society. In 1976, Apple Company was set up by selling computers. They expanded their business to other industries especially in music player and phone during the development of the company in last 11 years. (Apple company) Nowadays, Apple is the dominant marketing leaders in each field they joined in. The most significant factor of these excellent performances is the attitude to the value chain management. The obvious proof for this conclusion is the last sentence of the article as follow: Apple plans to double spending on its supply chain, to $7.1 billion, continuing its focus on streamlining and controlling manufacturing. The high focus level of the value chain generates the Apple’s amazing...
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...INTRODUCTION In 1996, Apple was a struggling company that had lost more than 70% of its market capitalization in the past decade. Apple’s sales had fell dramatically and their new personal computers weren’t particularly popular with consumers. The return of Steve Jobs to the company was a turning point for Apple and initiated a new era for the firm. With the launch of innovative products such as the iPod, iPhone and iPad, Apple became the biggest brand in the world. Now it remained to be seen if Tim Cook would be able to continue to develop new products and maintain Apple’s success. PROBLEM STATEMENT ANALYSIS 1) Review Apple’s supply chain for the iPhone. What differences set it apart from its competitors? The supply chain starts with the development of a new product each year, this lifecycle is shorter than the one for traditional products. During the development process, the design team works closely with the production team to ensure the feasibility of products in large volumes. In addition Apple products have a limited number of configurations, this allowed its supply chain to be streamlined opposed to some of Apple’s competitors (Dell) which have products with a large variety of characteristics. Another difference that set Apple apart from its competitors is that the company is highly integrated, with centralized R&D and accounting, instead of separate departments for each product. In the case of manufacturing, Apple likes to purchase key components in advance...
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...“An Apple a Day, Keeps Supply Chain Robust Another Day!” In their article, “Apples Supply-Chain Secret? Hoard Lasers,” Adam Satariano and Peter Burrows introduce us to several key attainments that Apple has been able to incorporate into their structure. Along with design and “buy or make” scenarios, Apple’s innovative and successful Supply Chain Management and Operational Divisions have leapt well above those of other companies. Satariano and Burrows also share with their audience the “front-runner” position that Apple took 4 years ago in Supply Chain Management. Coupled with partnering for innovation and the virtually unlimited capital that Apple has at their fingertips, gaining supplier respect and loyalty, they have them at their disposal. Meaning, with the exuberant and vast numbers of volume procured from these suppliers, Apple stands at the front of the line when it comes to product needed from any supplier. Their article begins with the design factor and “making the impossible, possible.” Utilizing its Supply Chain Management team, coupled with manufacturing and materials experts, Apple was confronted with what they deemed a critical design and manufacturing dilemma. Going on the old adage, “two heads are better than one,” they realized that this philosophy can be applied when attempting to resolve and provide innovation to their design barrier. Adding the new feature to MacBook’s, Trackpads, and their wireless keyboards initially proved to be a challenge. Posed with...
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...International Operations Management Strategies of Apple Inc. Introduction Apple is an American multinational technology corporation which has been highly regarded for its innovative products for a long time. Apple is recognised by customers for its hardware products including iPhone, iPad, iMac, iPod and Apple Watch, which ingeniously combine advanced features, unparalleled user experience and attention to small details in design (University Alliance, 2016). As an multinational company, Apple has its well-appointed retailing system with 475 retail stores in 17 countries (MacRumors, 2016), as well as online Apple stores and iTunes Stores of different regions. According to Forbes Lists, the market Cap of Apple is $741.8 billion in May 2015, which was identified as the most valuable brand (worth $145.3 billions) in the world (Forbes.com, 2015). For the first fiscal quarter 2016 ended December 26, 2015, Apple reported quarterly revenue of $75.9 billion with a net income of $18.4 billion (Apple Reports Record First Quarter Results, 2016). $65.5 billion of the revenue was driven by the sales of iPhone, iPad and Mac; $6.05 billion was contributed by the sales of services including Internet Services, AppleCare, Apple Pay and other services; other ptoducts like Apple TV and Apple watch brought $4.35 billion of revenue to this quarter (See Appendix I). Apple Corporation was founded by Steve Jobs, Ronald Wayne and Steve Wozniak in 1976 to sell personal computers (Richardson,...
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...example to discuss how ‘the sector matrix’ framework is useful for analysing demand and supply linkages in an industry. The end of the 20th century has experienced rapid changes in the way of trading, due to the expansion of capitalism. The Oxford dictionary defines capitalism as “an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state”. Due to high competition, firms have desperately been trying to reduce costs of production in order to maximise profits. Published in “Competitive Advantage” in 1985, Porter’s value chain is a great example to show how much importance firms gave to the supply side of the market in this period. Porter described the value chain as “a set of products and services linked together in a sequence of value adding economic activities”. In other words, it analyses the stages in which a product is created from raw material until it’s finished, each stage adding value to the product. Gereffi’s ‘Global Commodity chains’ uses the old strategy chains and links them with their political and geographical context, adding a spatial and territorial dimension to the demand and supply in a market.________________________________________ In 1998 in their article “Breaking the Chains? A sector Matrix for Motoring”, Julie Froud, Colin Haslam, Sukhdev Johal and Karel Williams tackled the settled chain concepts by showing its limits regarding complex industries such as motoring or healthcare...
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...procurement……………………………………………………..8 Disadvantages of Apple’s Procurement…………………………………………………..9 Conclusion…………………………………………………………………………………10 Introduction: When Apple design guru Jony Ive wanted a new feature for the next MacBook: a small dot of green light above the screen, shining through the computer’s aluminum casing to indicate when its camera was on, the problem? It’s physically impossible to shine light through metal. Apple discovered it could use a customized laser to poke holes in the aluminum small enough to be nearly invisible to the human eye but big enough to let light through. Applying that solution at massive volume was a different matter. Apple needed lasers, and lots of them. Most of Apple’s customers have probably never given that green light a second thought, but its creation speaks to a massive competitive advantage for Apple: Operations. This is the world of manufacturing, procurement, and logistics in which the new chief executive officer, Tim Cook, excelled, earning him the trust of Steve Jobs. What Apple learned is that for a very profitable business, you need to have 3 things perfected: 1. Low Overhead –outsource labor to a country with very cheap labor and favorable taxes 2. Low Cost of Goods Sold – Make friends with suppliers, get very cheap raw materials 3. Effective Supply Chain – Ensure that the customers get the...
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...Apple Manufacturing: Should More Apple Products Say “Assembled in the USA”? Production and Operations Management, BUS 5461 Abstract Apple, Inc. is a $170B global corporation that designs, markets and sells consumer electronic products such as the iPhone, iPad, and the Mac computer. Apple has structured their manufacturing and supply chain processes to take advantage of China’s cheap and plentiful labor. However, Apple has made an innovative decision to have the new ultra high-end Mac Pro partially manufactured and assembled in the US. This report includes research and analysis on the benefits available to Apple by expanding production in the US. Recommendations are presented that will help ensure apple succeeds in moving production to the US, and help reduce the risks Apple faces as a global corporation. Tables of Contents Chapter I – An Introductory Look at Apple, Inc………………………………………. 5-6 Chapter II – The Issues Facing Apple…………………………………. ……………… 6-8 Chapter III – Analysis: A Closer Look into Apple..…………………………………… 8-15 Chapter IV – Recommendations..……………………………………………………… 15-20 Chapter V – Summary ……………………….………………………………………… 20-22 References……………………………………………………………………………… 23-26 List of Figures Figure 1:Average Hourly Compensation Costs in Manufacturing, U.S. Dollars, 2002-2009….....9 Figure 2: Average Hourly Compensation Costs in Manufacturing, U.S. Dollars, 2002-2009……9 ...
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...Apple 1.Supply Management Model Apple gains a massive competitive advantage mainly due to its operational excellence. To abbreviate, it is Apple’s control over the whole supply chain, from designers to suppliers, from logistics to retail stores, that made Apple’s products popular and profitable. Apple’s designers work close to its suppliers and manufacturers, optimizing the old product lines to gain production competence at the very beginning. Apple then makes a great deal investments to suppliers and orders a high volume, so that it can earn stable production and low prices. By aligning with the suppliers, Apple not only gains high profit margin, but also handicap its competitors. As for the logistics, Apple also exerts control over carriers by making massive orders to gain lower cost. Electronic monitors and employees are used to account for every unit. Finally, at retail stores, Apple keeps tracking of the demand by day and adjusts its production accordingly. 2.Strengths and weakness, and potential risks Apple’s strength of the supply management model is rooted in its close alignment with its business strategy. Its creative supply management functions as a drive to its innovation for a decade. The strong control Apple exerts over the supply chain brings it agility from design to retail stores. Meanwhile, Apple earns bargaining power with suppliers by volume. This advantage makes Apple competitive because with a lower price quote from suppliers, it could lower the price...
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