Supply Chain Management of Apple Company

This report analyzes the supply chain management of Apple Company, including its overview, supply chain, alignment with business needs, key sourcing arrangements, and more. The report discusses the supply chain of Apple products, including iPhone and Mac personal computer, and how they align with the needs of customers and markets. The report also covers the key sourcing arrangements of the supply chain, including multiple suppliers, outsourcing partners, and long-term relationships. Challenges faced by the company and recommendations for improvement are also discussed.

Supply Chain Management
6/6/2018

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Contents
Introduction......................................................................................................................................2
Overview of company..................................................................................................................2
Supply chain....................................................................................................................................3
Supply Chain of Apple Products.....................................................................................................4
Alignment of a supply chain with the business needs.................................................................7
Key sourcing arrangements of Supply chain...................................................................................8
Multiple suppliers........................................................................................................................8
Outsourcing partners....................................................................................................................9
Long-term relationship..............................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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Introduction
The aim of the report is to throw light on the supply chain management and activities of the
company that has been selected. The company that has been selected for this analysis is Apple
Company. It includes the description related to the supply chain management and its activities. It
includes the supply chain of the brand and products of the Apple company and three business
requirements of the customers and brands are achieved with the help of supply chain or not. It
also includes the alignment of the supply China with the business requirement of Apple. The
three ways of sourcing the arrangements in the supply chain are discussed with the strategic
implication for each.
Overview of company
Apple Inc. is an American multinational technology company with the head office in Cupertino,
California. The company develops and sell the consumer electronics, computer software and the
other online services. The company is well-known in the market because it is the world’s largest
information technology company in terms of the revenue and the world’s 2nd largest mobile
phone producer just after the Samsung Company. In addition, the company is known as the first
US Company whose value is more than US$700 billion.

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Supply chain of the company
A supply chain is referred to as the system of organization, people, activities, resources, and
information that are included in moving a product or service from supplier to the customer. The
activities of the supply chain involve the conversion of the natural resources, raw material and
the components into the finished product that is distributed to the end customer (Christopher,
2016). In simple words, the activities of the supply chain include retail, manufacturing, sourcing,
procurement, returns, resale, demand management and many others. Apple is famous for the
design and innovation in their products and ensures that their supply chain for the product is
effective. The company will handle the inventory which is factor that might lead to the success
of the business. According to the research conducted by Gartner, Apple supply chain rank 1st in
the world in the every year from 2010 to 2013. This is the fact that the supply chain of Apple
Company is too complex.
The supply chain is linked to the relationships, partners and the shareholders of the Apple
Company. The supply chain comprises the coordination and collaboration with the channel
partners which can be intermediaries, suppliers, and providers of raw material and the customers
of the Apple Company (Stadtler, 2015). The company ensure that they are able to form the
effective relationship with their suppliers, distributor and other which are essential for the
management of the effective supply chain. Apple Company makes the procurement of material
from the different suppliers and then gets them shipped to the accumulating plant in China. The
company distribute the products through retails stores and other distributors. The customers of
company can also send the products back to the nearest apple stores for the recycling facility
which is essential to be fulfilled by the company.

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Strategy of Apple Supply chain
The company ensure the consistency among the purchaser priorities of the competitive advantage
strategy and the supply chain capabilities that are specified with the help of the supply chain
strategy that is known as Strategic fit (Hettiarachchi, 2018). The below image reflect that the
strategy of the company is sophisticated agile supply chain strategy.
(Source: Hettiarachchi, 2018)
The 3 major activities that are important for the supply chain of the Apple Company include
sourcing, manufacturing, and distribution.
 Sourcing is the process of finding the suppliers of the goods and services. The goal of the
apple company is to form the connection with the suppliers in the different nations as this
is the way through which they can expand the business.
 Manufacturing is the process in which the company produces the products which they
offer to their customers (Hugos, 2018). Apple Company believes in producing the
innovative products and get the products assemble with the services and technology. This

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fulfills the goal of a company that is to produce the products that can meet the needs of
the customers. In addition, this will leads to the customer satisfaction.
 Distribution is the process through which the company can make the goods available to
the customers. Apple wants to make the products easily accessible to the customers who
can consume the products easily. The goal of the company is to enhance the reach of the
products to the customers.
The above are the activities that support the company to meet the strategic goals for all the
products that are offered by the company.
Supply Chain of Apple Products
The supply chain of the company is different for the numerous products that are present in the
market. Apple company two major products that are picked for the supply chain management
include Apple iPhone and Mac personal computer. It is essential to understand the supply chain
of the products first for understand the requirements of the customers and market needs of the
brand.
IPhone supply chain
The iPhone is one of the most important and recognized product in the market. This product
always comes with some innovation in it and this is most demanded product by the customers
(Wisner, Tan and Leong, 2014). The below given is the supply chain of iPhone which include
the design and development, sourcing, manufacturing then distributing the goods and keeping
them in the warehouse.

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(Source: Kays, 2018)
Mac Personal computer
Another supply chain of the product that has been selected Mac personal computer. The below
given is the supply chain of the Mac personal computer. This is the same process which is done
by the company for the iPhone but over here the sourcing of raw material is very important.
Moreover, the company offers the facility of return of the products at the company’s store.

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(Source: Blank, 2015)
Apple Company need to ensure that they are able to align their products supplies chain according
to the needs of the customers and markets. The major 3 requirements the markets/customers of
the products would have towards the supply chain include: -
Easy accessibility of product: - The customers and the market retailers of the product require
that there is the easy accessibility of the iPhone and Mac Personal computer because these two
products are highly demanded by the customers in the market. Moreover, at occasions, the
retailers want to meet the requirement of the customers for which there is need of an effective
supply of the products of Apple Company (Ayers and Odegaard, 2017).

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Warehouse management: - Customer and marketers of the company want fresh products
without any damage for which there is the need for the proper handling of the products. iPhone
and Mac PC of Apple brand are very sensitive and breakable products due to which the brand
need to manage the warehouse effectively. In addition, the products of the brand are expensive
due to which there is need to handle the products with care. The careful dealing with the products
is essential because this is the way through which they can offer the fresh and quality products
which help in enhancing the reputation of the brand (Carter, Rogers and Choi, 2015). The
warehouse management will help the company in managing the supply of the products.
Relationship with logistics provider: - The relationship with the logistics provider is very
essential for the company. The company is well known in the market due to which they are able
to form the strong relationship with the suppliers and this will support the company to overcome
the leading challenges of the customer relationship. The maximum number of the business turns
to the third party logistics providers for which they need to engage in the collaborative and the
strategic approach. This relationship will help the company for the effective partnership and
enhanced end-user service from shipping to customers (Kozlenkova, et al 2015). The relationship
is essential to meet the changing needs of the customers in the current market for the company.
The below given is the suppliers of the company to whom the Apple form the relationship for its
product which is offered in the market.

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(Source: Kays, 2018)
Alignment of a supply chain with the business needs
The needs of the business include the basic needs of the customers and the market retails that are
available in the market. Apple company need to ensure that business needs get to align with the
supply chain of the products. Though, the company found the issues in the management of the
warehouse because the transportation of product till the warehouse leads to the difficulty. This
might leads to the impact on the effective management of the warehouse because the stock
supply will get affected (Griffin, 2018). In addition, the relationship with the supplier is the only
way through which the company maintains the supply chain. Apple Company has different
suppliers from whom they source the products and these suppliers are available in USA, China,
Asia and Europe. The major challenge that might be faced by the company includes the limited

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number of suppliers. The company should increase the number of suppliers from which they are
sourcing the raw material for the products. Moreover, the company is depended on its partners to
adhere the suppliers which are an emerging challenge for the company. Apple brand needs to
bring some improvements in their products so that they can achieve their strategic goals.
Key sourcing arrangements of Supply chain
In the current century, the partnership models are common in today’s supply chain and it also
includes arrangements of traditional sourcing with the collaboration and outsourcing (Mangan,
Lalwani and Lalwani, 2016). Apple is also depended on the partners for the sourcing which is
done with the help of the collaboration and outsourcing. The major 3 sourcing arrangements that
are available in the supply chain include: -
Multiple suppliers
The company follows the apple dual sourcing strategy with the help of which they can source its
components from at least 2 suppliers so that they can decrease the risk and can have negotiation
strength. Moreover, in the year 2016, the company make use of a dual-sourcing strategy for the
cellular modems. The company sourced 30.0% of its modems iPhone from Intel and remaining
from Qualcomm (Tanner, 2017). Before the implementation of the dual sourcing strategy,
Qualcomm was the only supplier of Apple Company for the modem. In addition, there are some
of the products that are sourced from the company from a single supplier. The below-given
image reflects the list of the suppliers with the highest exposure in Apple company.

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(Source: Tanner, 2017)
Sourcing from multiple suppliers will help the company in reducing the dependency on the
single supplier of the company. The suppliers of the company are diversifying to reduce their
dependence on Apple Company.
Outsourcing partners
The supply chain of the product of the company is totally depended on the outsourcing partners
who simply mean that the company’s supply chain is management by the partners of the
company with the help of outsourcing. The logistics services of the company are done with the
help of outsourcing which means the arrangements in the supply chain is done by the partners
(Bag, 2016). Outsourcing works as a strategy which helps the company in getting the work done
in another country. This shows that for the supply chain arrangements the company is depended
on the outsource partners.

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Long-term relationship
The company has the extensive network of the 3rd party suppliers in the supply chain of its
products (Sutter, 2017). Considering the research, the company has 785 suppliers in more than
31 countries (Australian Institute of Company Directors, 2015). The company has a long-lasting
relationship with the suppliers due to which they came to the agreement with the supplier. In
addition, this is the only way through which the company can bring the decrease in the prices of
the raw material that is sourced by the company. Along with this, the company is able to source
the strategic raw material and the guarantee high volume of production of products helps the
company. Along with this, the long-term relationship with the distributors of the product also
helps a company in making the product available to the final customers which are the main aim
of the company that is required to be fulfilled.

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Conclusion
In the end, it can be concluded that the Apple Company follow the supply chain effectively so
that it can achieve the goals of the company. The supply chain activities help the company in
accomplishing the goals of the company. The supply chain of the two major products that is
iPhone and Mac PC is discussed in the report which shows the how they make the product
available to the final customers. Moreover, this also includes the need of the customers and
market from the supply and its alignment to the company needs. Though, some of the challenges
between the relationships are faced by the company which is discussed. In the end, the Apple
company souring arrangements are discussed that contribute to the success of the company
because which the arrangement of sourcing the company can't achieve the goal. Currently, the
company is focused towards the multiple suppliers sourcing strategy that is implemented by the
Apple company.

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References
Australian Institute of Company Directors (2015) A case study of Apple's supply chain [Online].
Available from: http://aicd.companydirectors.com.au/advocacy/governance-leadership-centre/
governance-driving-performance/a-case-study-of-apples-supply-chain [Accessed on 6th June
2018]
Ayers, J.B. and Odegaard, M.A. (2017) Retail supply chain management. CRC Press.
Bag, S. (2016). Flexible procurement systems are key to supply chain sustainability. Journal of
Transport and Supply Chain Management, 10(1), 1-9.
Blank, K. (2015) Apple: A Global Leader in Supply Chain Management [Online]. Available
from: https://smbp.uwaterloo.ca/2015/06/apple-a-global-leader-in-supply-chain-management/
[Accessed on 6th June 2018]
Carter, C.R., Rogers, D.S. and Choi, T.Y. (2015) Toward the theory of the supply chain. Journal
of Supply Chain Management, 51(2), pp.89-97.
Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
Griffin, A. (2018) Apple Reveals Latest Supply Chain Responsibility Report, Revealing New
Details About How iPhones And Other Products Are Actually Made [Online]. Available from:
https://www.independent.co.uk/life-style/gadgets-and-tech/news/apple-supply-chain-
responsibility-report-latest-update-2018-2017-iphone-release-a8245146.html [Accessed on 6th
June 2018]

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Hettiarachchi, H. (2018) Apple's Supply Chain Strategy [Online]. Available from:
http://www.academia.edu/30915118/Apples_Supply_Chain_Strategy [Accessed on 6th June
2018]
Hugos, M. H. (2018). Essentials of supply chain management. John Wiley & Sons.
Kays (2018) Apple Supply Chain [Online]. Available from: http://kays.makehauk.co/apple-
supply-chain/ [Accessed on 6th June 2018]
Kozlenkova, I.V., Hult, G.T.M., Lund, D.J., Mena, J.A. and Kekec, P. (2015) The role of
marketing channels in supply chain management. Journal of Retailing, 91(4), pp.586-609.
Mangan, J., Lalwani, C., and Lalwani, C. L. (2016). Global logistics and supply chain
management. John Wiley & Sons.
Stadtler, H. (2015). Supply chain management: An overview. In Supply chain management and
advanced planning (pp. 3-28). Springer, Berlin, Heidelberg.
Sutter, B. (2017) 3 Ways To Make Customer Service Your Best Supply Chain Strategy [Online].
Available from: http://www.waspbarcode.com/buzz/supply-chain/ [Accessed on 6th June 2018]
Tanner, P. (2017) How Suppliers Are Reacting to Apple’s Dual-Sourcing Strategy [Online].
Available from: https://marketrealist.com/2017/06/how-suppliers-are-reacting-to-apples-dual-
sourcing-strategy [Accessed on 6th June 2018]
Wisner, J.D., Tan, K.C. and Leong, G.K. (2014) Principles of supply chain management: A
balanced approach. Cengage Learning.

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