Logistics And Supply Chain Concepts Management – An Overview

Introduction to Apple Inc’s Supply Chain

Discuss about the Logistics and Supply Chain Concepts Management.

According to Zahra (20089), Apple Inc (as our model study) is considered the company to have the best supply chain in the world. This is backed by the fact that the company has the fastest growing potential coupled with its advanced product development. Since the firm develops software, hardware, and related digital services, it is able to offer an unmatched client experience. Apple Inc has a captivating supply chain which is distinct from the other outmoded supply chains. Its associated supply chain is accompanied with a pre-built merits and demerits. The demand management in the company is easily achievable in the company. This is because it does not have to acquire an accurate demand forecasting for the product. Provided the supply chain department is able to underestimate demand for a new product, it will automatically attract new clientele demanding for the same innovative devices and enthusiastic to wait for its full manufacture. As a norm, the anticipated backlog leads clients to await  for stores to open to purchase the new product.

Information Flow

The solicitation for citation, buy request, month to month plans, designing change demands, quality grievances, gives an account of supplier execution streams from Customer side to Supplier. From supplier side to Customer, it would be presentation of organization, offer, affirmation of procurement request, covers move made on deviation, despatch subtle elements, report on Inventory, solicitations and so forth. In the event that inventory network must be effective, steady connection needs to happen amongst supplier and Customer. As a rule, different accomplices like merchants, merchants, retailers, logistic administration suppliers are included in the data system. Further to this, different offices at Supplier and Customers are in the Information circle. Interior data stream inside the Customer for in-house production is discrete.

It moves regularly from Supplier to Customer. It could be through different stockrooms among merchants, merchants and retailers. Challenge here is to guarantee that material streams rapidly without stopping as stock in different focuses in the chain. Quicker it moves, better it is for the organization as it decreases money cycle. For repairs, trade, at end of life material can likewise spill out of Customer to Supplier. At last, completed products stream from Customer to their Customer through different offices. In light of receipt raised by supplier, Customer does check for rightness. On the off chance that that is right, cash will spill out of Customer to Supplier. There could likewise be stream of cash from Supplier to Customer as charge notes.

Flow in Supply chain management

For a proficient and successful production network, it is critical that each of the three streams are overseen legitimately with slightest endeavors. For store network supervisor, it is extreme errand to choose which Information is imperative for the right choice and he or she would like to have perceivability of all streams by snap of a catch. Pursuing for Information such as level of Inventory prepared for dispatch is a non-esteem included action. In this connection, Purchasers will turn out to be some time chasers.

Production network administration is the administration of connections in the system of associations, from end clients through unique suppliers, utilizing key cross-useful business procedures to make esteem for clients and different partners. Fruitful store network administration requires actualizing cross-utilitarian procedures inside the organization and coordinating them with key individuals from the inventory network. Significant assets are squandered when supply chains are not coordinated, properly streamlined, and oversaw. The benefit of having standard business forms set up is that administrators from various associations in the store network can utilize a typical dialect and can interface up their organizations’ procedures with different individuals from the production network, as appropriate. The system portrayed in this paper is based on eight key business forms that are both cross-practical and cross-firm in nature. Every procedure is overseen by a cross-utilitarian group, including delegates from logistics, generation, acquiring, back, showcasing and innovative work. While every procedure will interface with key clients and suppliers, the client relationship administration and supplier relationship administration forms frame the basic linkages in the store network.

Because the company is ever enlarging in size, it tends to enjoy procurement advantages, which its smaller competitors cannot rival. This feature has made financial analysts to focus much on the Apple Inc’s supply chain. At a time when Samsung lost close to $9.5 billion in its market value, Apple had employed a vast order for flash memory with a firm called Elpida, and in the process, it managed to secure half of that company’s supply. According to Sheth & Kellstadt (2002), Apple Inc is reportedly known to have price advantages when it comes to securing key elements, airfreight bulk and manufacturing capacity. Just like other corporations that enjoy having colossal procurement power, whenever Apple Inc asks an interested supplier for price quoting, it always demands as comprehensive accounting of how such a manufacturer arrived at such a quote. This includes estimations for material and labor costs as well as anticipated profit. Thus, manufacturers are keen since they can be faced with penalties for warranty claims and quality issues. At the moment,  Mina, A, Connell, D, and Hughes (2009) reports that Apple Inc is expanding to an extent that irrespective of its various made-to-order elements that it can cater for, its cost structure has started resembling that of some of its competitors that operate by sourcing common elements.

Material Flow

The managing of new product unveilings is taken seriously for any manufacturer that enters into a contract with Apple. The involved process right from design to manufacture launch usually consumes a period of 10 months. This comprises sourcing activities, testing activies, awaiting government approvals, and finally allowing for factory runs for various weeks before the launch. The involved factories will work overtime to build several devices and thereafter work more overtime with the goal of clearing the backlogs. Research by Chen & Ching-Hsun (2012) documents that Apple’s normal labor strategy is for its employs to work for a max of 60 hours per week to qualify for a one day a week. Whereas the present client base of the company has largely overlooked the instituted labor dealings problems, the company’s supply chain has remained to have a low-risk profile. Majority of its core elements come from countries such as Northern Taiwan.

Just like any company out there that aims to improve the flow of funds along the supply chain, Apple too should work to improve the flow of information and goods, since funds flow relies heavily on their complete and correct flow. It needs to align the funds flow more closely with the right flows. Apple Inc needs to integrate more closely the involved processes dealing with funds flow. The supply chain planning at the company is designed to incorporate research and development, inventory management, forecasting, demand, and cost analysis. The supply chain department at Apple Inc has streamlined the process of supply chain by minimalizing the figure of facts along the supply chain between customer and assembly by ensuring there is direct shipment of products directly to customers. In addition, for the distribution channels including direct sales, direct distributors, and retail stores, Apple maintains all its goods at a pivotal warehouse restocks as demand and inventory shift.

The company’s warrant return policy, recycle/reuse, and trade-in suite creates a closed-loop scheme for regaining product parts at every end of the supply chain. Apple’s supply chain attainment is attributed to various reasons but majorly starts with planning. Metal manufacturers are urged to keep watch on raw materials and market forces and developing sound forecasting models in order to predict supply chain flow.

According to the proposition by Gabrielsson & Gabrielsson (2004), a firm may specialize in one or more value chain undertakings and then outsource the remaining. The degree to which a firm carries out upstream/downstream accomplishments is determined by the point of vertical integration that aids in facilitating outsourcing decisions. As a way of determining the decisions to guide in outsourcing, the company management ought to comprehend the organization’s strengths and drawbacks in each of the activity, with regard to ability and cost differentiation. Thereafter, Apple can then consider certain factors while making a selection of the activities to outsource. The first factor is to determine the activity that can be undertaken cheaply or in a better way by its suppliers. Secondly, the firm has to know whether the supply chain activity is among the corporation’s fundamental competencies from which arises product differentiation or a cost advantage. Third, the risk involved in carrying out the activity in-house should be well defined. For instance, if such an activity results in business process improvements including reduction inventory, higher flexibility, and reduce lead-time.

Money flow

In terms of developing a strategic vision relating to marketing, Apple’s approach towards marketing of products can alter situations in affirmative ways, despite their dominance in the industry they have to improve the international marketing strategies to a completely new level. In order to increase Apple’s market share, the company will have to strive hard to maintain its existing clients and even attract new ones. Attaining this strategy necessitates the company to exhaustively understand its own clientele base as well as that of its rival businesses. This alternative will further allow the company to take opportunities to diversify in terms of new related commodities and services to existing clientele. However, the challenge comes in when the company has to be clear about development costs and the hassle of controlling risks by securing commitments and risks up front. Apple Inc should adopt this cost minimization execution strategy that would in turn lead to price minimization, leading to a surge in sales and thus increased revenues in both short run and ling run. The market can only be effective for any organization in the contemporary generation if they are ready to embrace changes in their management and operations. To illustrate the prowess of Apple, when one takes the ergonomic product design of the iPhone, iPod, and computer; one notices a modern, simple, and clean user interface. In most of Apple’s products, the primary organic and geometric forms have same materials.

Supply chain, according to Gabrielsson & Gabrielsson (2004), refers to a set of approaches used to efficiently incorporate suppliers, warehouses, manufacturers, and distribution centers so that the produced product gets distributed at the right time and in the right measures. Apple Inc has so far recorded success in selling its products and has attained the highest client satisfaction ratio. One of the key problems facing Apple is that main customers are unable to purchase due to higher products on most of its products. Secondly, the company does not have any paper work for supplier codes, maximum markets, and indirect reachability, and that its app store is dependent on third party contractor.

Apple is brazen out with criticism on its governance, possible human resource turnover, and other smaller issues such as Apple failing to be a socially responsible corporation (Aaker & Mcloughlin, 2010). This paper recommends that Apple Inc should adopt cost minimization strategies that would in turn lead to price minimization, leading to a surge in sales and thus increased revenues in both short run and ling run. Results that are more conclusive are expected to be found because this method is lined with finding profit growth goal of company. The era of technology is growing, and it would be prudent for Apple to use its existing technological capabilities to minimize errors in its designed products and strengthen its app store (Aaker & Mcloughlin, 2010).

The Make Process in Supply Chain Management’

Apple has achieved magnificently over the years. It is evident that despite the high status and level set by the Apple Company, there exist certain problems that might destroy their plans. As mentioned from the revealed research, their major challenge pops up due to the existence of other companies that offer similar goods and services as them. Over the years, the technological field has opened up a platform where many innovations are made possible due to improved techniques and powerful financial capabilities. Therefore, it is worth mentioning that the probability of presenting similar products with parallel features and advantages to people is very high (Apple official website, 2012).

Since the company houses a retail store in its main branch, it has the capability to make demand forecasting easily. This implies that Apple is capable of increasing its average inventory. It has been postulated that in case the company will be able to maintain its capacity to house more stocks, Gabrielsson & Gabrielsson (2004) sees the potential that these are likely to be damaged and obsolete. Apart from that, the company’s product life cycle is projected to be longer than seasonal items, a factor that makes Apple to remain resistant to seasonal changes. Nevertheless, the company usually takes advantage of holidays where there is boom in buying and selling. The demand for products is estimated to increase rapidly during this period, making the company to order products by air and not by sea. As an added advantage, the shipping charges by the ship are more costly as compared to airfreight. Having its own established warehouse in California would allow the company to order for its products direct from the warehouse, a factor that will greatly contributes to a simplified supply chain process. This further implies that Apple stores act as stocking point between downstream and upstream. The capability to simplify product process is the best strategy to eradicate redundant product lines. Alain (2008) relates this type of movement of goods to lean manufacturing.

Major Findings, Recommendations, and Conclusion

This paper recommends that Apple Inc should adopt an effective supply chain forecasting strategy that would in turn lead to price minimization, leading to a surge in sales and thus increased revenues in both short run and long run. The market can only be effective for any organization in the contemporary generation if they are ready to embrace changes in their management and operations. The company has so far recorded success in selling its products and has attained the highest client satisfaction ratio. One of the key problems facing Apple is that main customers are unable to purchase due to higher products on most of its products. Secondly, the company does not have any paper work for supplier codes, maximum markets, and indirect reachability, and that its app store is dependent on third party contractor. Apple is brazen out with criticism on its governance, possible human resource turnover, and other smaller issues such as Apple failing to be a socially responsible corporation (Gabrielsson & Gabrielsson, 2004). This paper recommends that Apple Inc should adopt cost minimization strategies that would in turn lead to price minimization, leading to a surge in sales and thus increased revenues in both short run and ling run. Apple Inc can possibly lessen its future threat through increasing investments. The era of technology is growing, and it would be prudent for Apple to use its existing technological capabilities to minimize errors in its designed products and strengthen its app store.

References

Aaker, D. A, and Mcloughlin, D. (2010) Strategic market management global        perspectives, Chichester: Wiley.

Alain, 2008, You can’t Innovate like Apple [Available             at] https://www.pragmaticmarketing.com/publications/magazine/6/4/you_cant_innovate_like_apple [Accessed on 24 Nov 2010]

Apple official website (2012) Resolutionary, Accessed July 4th 2012,         https://www.apple.com/ipad/

Chen, Y, and Ching-Hsun C. (2012) “Enhance green purchase intentions: The        roles of green perceived value, green perceived risk, and green trust”,            Management Decision, 50 (3), 502 – 520.

Gabrielsson, P. and Gabrielsson, M. (2004) Globalizing internationals: business   portfolio and marketing strategies in the ICT field, International Business          Review, 13, pp. 661-684.

Mina, A, Connell, D, and Hughes, A. (2009) Models of Technology development in          Intermediate Research Organizations, Working Paper, No. 396, Trumping   Street, Cambridge.

Sheth, N. and Kellstadt, C. (2002) Future of relationship marketing, Journal of Services Marketing, 16(7), 590-592.

Zahra, S. A. (2008). Being entrepreneurial and market driven: implications for company performance, Journal of Strategy and Management, 1(2), 125- 142.