The supply chain denotes a system of the firms, people, information, resources and activities that are involved in the deliverance of the product to the customers (Stadtler, 2015). The supply chain management of any organization is one of the major aspects of the successful business. In the language of commerce, the supply chain management is entails the flow of the products and service in both in the organization as well as to the customers. The supply chain is a process of designing, planning, executing, monitoring and controlling the activities of the supply chain for determining the success values and sustainability of the company (Seuring, 2013). The management of the supply chain determines the sustainability of the organization in terms of gaining the competitive advantages in the targeted market. The deliverance of the products to the consumers also influenced and determined by the supply chain management of the firm. The chosen company for the repot is Apple and following report presents the complete process of the supply chain management of the organization from a critical view.
Apple is one of the leading and prominent players who are known for their effective supply chain management. Due to the fact that, they are having their operational facilities across the world, they are also in the need of the effective supply chain management in order to manage their partners in forward and backward integration (Winter & Knemeyer, 2013). However, one of the key factors that they have effectively maintained is the alignment of the supply and demand theories in their supply chain management. According to the theory of supply, organizations will supply and sell their products in the market according to the price trend in the market (Waters & Rinster, 2014). The more will be the price of the products of Apple in the market, the more rate of supply will be the done by them and vice versa.
Thus, aligning the supply theory with the supply chain management of Apple is helping them in maintaining their productivity of their supply chain according to the market trend (Canto, Joines & Laffer, 2014). Thus, the profitability and the effectiveness of their supply chain are being enhanced. Another key advantage that Apple is gaining from aligning the supply theory is ability to maintain little inventory in hand, which further helps them in reducing the cost of warehouse and depreciation. This is made possible by them due to the fact that, alignment of the supply theory helped them to stock their products more when the price will be higher in the market (Barney, 2012).
Apple’s supply chain management has gained effectiveness also due to implementation of the demand theory in their supply chain management (Teece, 2014). According to the theory of demand, the more will be the price of the products in the market, the less will be the demand for them. Thus, there is an inverse relationship between the demand and price. This made the demand curve downward sloping.
One of the key advantages that have been gained by Apple in aligning the demand theory with their supply chain management is maintaining the supply chain in order to have the favorable flow of the products in the market (Rushton, Croucher & Baker, 2014). The more seamless flow will be there in the market, the more availability of the products will be there. This will eventually maintain the effective price in the market of the products. Thus, the key objective of their supply chain management of having seamless supply of the products in the market is being enhanced with the alignment of the demand theory. This concept is also helping them in determining the gap in their supply chain by evaluating the fluctuation in the price of the products along with their demand. Thus, if the price of the products gets increased along with the reduction in the demand, then it can be easily identified that the supply chain management of Apple is not operating effectively and vice versa.
One of the key benefits that Apple is gaining is the increase in the profitability and effectiveness. This is due to the reason that, due to the effective alignment of the supply and demand theories in the supply chain management of Apple helps them to maintain the supply of their products according to the market forces such as demand and price. This in turn increases the efficiency of their entire process of supply chain management (Gimenez, van der Vaart & Pieter van Donk, 2012). Another advantage that has been identified is the empowerment of the internal stakeholders in the supply chain management. This is due to the reason that, in the case of the alignment of the supply and demand theories in the supply chain management, the decisions are being taken by the responsible stakeholders according to the market scenario rather than following the hierarchical orders. It also helps them in enhancing the efficiency of their supply chain management.
The organizational activities of the Apple are mostly dependent on the supply chain management of the company. Being one of the leading companies in the electronic digital market, the supply chain of the company is string and well organized. In fact, the company is into the green procurement for maintaining the sustainability of the company in the competitive market (Kumar, Teichman & Timpernagel, 2012). The supply chain of the company is indicated towards the reduction of elimination of landfill waste, carbon emissions, conservation of the water and replacement of the unsafe and harmful chemicals. The supply chain of Apple is indicated towards the responsibility off the suppliers towards the organization as well as the society and environment. The company deals with more than 154 suppliers and one central warehouse along with the 250 owned stores. In regard to this, it must be mentioned that the organization uses more than one supplier for one component which reduces the risk in the supply chain.
The supply chain management of the organization is a fine example to other companies existing in the same industry. For gaining the competitive advantages from the market, Apple is has started the zero-waste program for their suppliers which is helping the organization to eliminate the landfill waste (Roh, Hong & Min, 2014). Also the company is into the recycling of the e-waste so that the unsafe chemicals can be replaced. It must be noted that China plays an important role in the supply chain management of the company. Apple purchases the raw materials from various suppliers and ships those components to China (Sodhi & Tang, 2012). The components are assembled in Chine and from there the final products are shipped to the consumers directly. Other distribution channels like retail stores and various other distributors, Apple shipped products at a hub at California and distribute the same from there (Wolf, 2014). The customers are also provided with the facilities to return the products at the end of the life cycle of the product to the nearest Apple stores, where the products are recycled. It proves that the supply chain of the Apple is well managed and well organized.
External supply chain for Apple refers to the supplying the products to the intermediaries in the market including to the wholesalers to retailers and finally to the end customers. However, it is important for Apple to effectively manage the external supply chain of them. This is due to the reason that, to have the effective supply of the products for the potential customers, intermediaries including the wholesaler and retailers should be effectively managed. Effective management of the intermediaries will help Apple to determine the market trend along with change in the taste and preference of the customers (Malhotra & Mackelprang, 2012). Thus, the more effective will be the external supply chain management, the more will be the determination of the customer requirement of the products of Apple in the market. Therefore, it is required and important that Apple should effectively manage their external supply chain management.
Internal supply chain refers to the sourcing of the raw materials by the organization and initiating and manufacturing process and distributing it. Effective management of the internal supply chain management is important due to the reason that, there should be the alignment between the sourcing of the raw materials and the rate of production. This will help to have the seamless supply of the raw materials for the production process. Moreover, the produced items should be effectively distributed through the implemented distribution channels (Wisner, Tan & Leong, 2014). This step should also be managed effectively due to the reason that contemporary business organization such as Apple is having multiple channel of distribution to cover all the target market and all the target customers segments. Thus, effective management of the internal supply chain is required in order to properly align the sourcing of the raw materials, production process and distribution strategy. The more effective will be the external and internal supply chain management, the more effective and efficient will be the process of sourcing the raw materials to offering the products to the end customers.
Conclusion:
Therefore it can be concluded from the above discourse that the supply chain management is vital for Apple as the supply chain of the company determines its profitability and sustainability in the market. Also the supply chain is responsible for influencing the demand of the products within the customers. The report discusses performance of the organization’s supply chain in terms of delivering the products to the customers. On the other hand the organization is into the green management through the supply chain of the organization. Apple, being one of the leading electronic digital companies in the international market outs effort for maintaining its sustainability by giving values to the green supply chain management. At the same time, the organization effectively manages the supply chain of Apple for increasing the sales according to the market demand and for effective business activities in the international market. Besides, the organizational performance in regard to the supply chain management indicates management and fulfillment of demand of the customers. The report highlights different reasons for managing the external and internal supply chain for increasing the graph of the profitability of the same in the competitive market.
Despite the firm’s management of the supply chain being well organized and well-managed, it needs some recommendation for enhancing the business activities as well as facilities for the customers. It is found that, the company has approximately 250 stores around all of its operating country, but there are many countries which do not have enough Apple stores (Roh, Hong & Min, 2014). The lack of Apple stores is creating hazards for many customers in terms of having any kind of technical support for the products and this leads the recycling process of the product to take more than usual time. This situation is capable of reducing the demand off the customers of the products of Apple. Therefore, it is recommended that the company must open sufficient number of stores in all of its operating countries for serving the customers as well as increasing the profitability. On the other hand, the cost of the product is another major reason that is capable of reducing the demand of the customers and the profitability of the firm accordingly. As per the discussion in the report, the company purchases same components from more than one supplier, which automatically increases the cost of the final products. However, the quality of the products is rich and high, but at the same time all the consumers are no capable of buying the products. Therefore, by reducing the number of suppliers for each component, the company can gain more competitive advantages from the international market.
Reference
Barney, J. B. (2012). Purchasing, supply chain management and sustained competitive advantage: The relevance of resource?based theory. Journal of supply chain management, 48(2), 3-6.
Canto, V. A., Joines, D. H., & Laffer, A. B. (2014). Foundations of supply-side economics: Theory and evidence. Academic Press.
Gimenez, C., van der Vaart, T., & Pieter van Donk, D. (2012). Supply chain integration and performance: the moderating effect of supply complexity. International Journal of Operations & Production Management, 32(5), 583-610.
Kumar, S., Teichman, S., & Timpernagel, T. (2012). A green supply chain is a requirement for profitability. International Journal of Production Research, 50(5), 1278-1296.
Malhotra, M. K., & Mackelprang, A. W. (2012). Are internal manufacturing and external supply chain flexibilities complementary capabilities?. Journal of Operations Management, 30(3), 180-200.
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Sodhi, M. S., & Tang, C. S. (2012). Strategic approaches for mitigating supply chain risks. Managing Supply Chain Risk, 95-108.
Stadtler, H. (2015). Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.
Teece, D. J. (2014). The foundations of enterprise performance: Dynamic and ordinary capabilities in an (economic) theory of firms. The Academy of Management Perspectives, 28(4), 328-352.
Waters, D., & Rinsler, S. (2014). Global logistics: New directions in supply chain management. Kogan Page Publishers.
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