Challenges and Recommendations for Apple's Supply Chain Strategy

Running Head: SUPPLY CHAIN 1
Apple Supply Chain
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SUPPLY CHAIN 2
Executive Summary
This report examines the challenges that Apple faces in its current supply chain strategy. The
objective resonates with the need for improving the supply chain architecture by addressing the
trends of outsourcing and its dangers. The risks involved in the overall supply chain are aligned
to the lack of Apple to spend enough time with suppliers so that it can completely comprehend
the cost structure. The report will highlight how the leading supply chain risk is that Apple does
not have an agile approach, which makes the cost of production to be high hence affecting the
performance of the product in the highly competitive technology innovation companies.
Introduction and Background
Apple emerges among the most successful innovation companies in the world based on
profitability and market capitalization. In terms of the supply chain, Apple has succeeded. The
success is due to the company's supply chain management. As a result, the company has more
than 30,000 suppliers all over the world (Jayaram, Tans, and Nachiappan, 2010). The agility of
Apple's supply chain is lacking, and it can only be made secure by combining supply chain
models that are responsive, which allows the company to respond to the diverse, changing sand
unpredictable customer demands and minimize the back end risks of disruption in the supply
chain process.
Literature Review
Push and Pull Strategies
According to Puchkova, Le Romancer, and McFarlane (2016), push strategies include
showrooms, tradeshows, and getting retailers to stock the products, and this creates the supply
chain that facilitates distribution. On the other hand, pull strategies help in motivating customers
in order to actively seek out given products in the event the manufacturer has a strong brand

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(Steinfield, Markus, and Wigand, 2011). Today, Apple's strategy is mainly push strategy based
on its focus on maintaining communication between the product and the buyer. The evidence of
push strategy is in several advertisements and marketing promotions. In principle, Gou et al.,
(2016) indicate that the push strategy in Apple's supply chain draws its strength hinged on the
ongoing speculation of the customer demands. Therefore, the company tries to push as many
products in the market as possible.
The principles of push strategy management demonstrates the model of helping the organization
to undertake supply chain initiatives that allow the segmentation of customers based on the
service needs to adapt to the operational efficiencies and segments' profitability (Puchkova, Le
Romancer, and McFarlane, 2016). The supply chain leads to the logistics models of agility
operating at strategic, operational, and tactical levels.
Just in Time Logistics
Just in Time (JIT), management is a principle that aims at improving the performance of
manufacturing companies by ensuring a reduction in waste of resources. In this case, resources
include both raw materials and time. JIT ensures that suppliers supply only the right amount of
raw products for producing a certain amount of products and that the manufacturer produces the
intended products within a specific time. In other words, JIT ensures that producers manufacture
products with the minimum amount of resources possible without compromising on quality,
production time, as well as quantity (Lai and Cheng, 2016). For Apple to achieve JIT, it should
focus on maximum cooperation between the management and the workforce. The cooperation
ensures that customer meets their needs as it regards to the products’ quality. Simple systems are
easy to use as well as ensure that problems can easily be detected hence why it is a part of the

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JIT continuous improvement (Lacomme, Prodhon, and Vigo, 2016). JIT recognizes that Apple
meets the need to reduce wastes when there are overproduction and time wastage.
Supply Chain Risks
While Apple has succeeded in operating lean and progressively more global supply chains,
potential risks of interruption have increased exponentially from internal and external factors.
There are various sources of these risks, such as the erratic market forces that affect market
demand, supply, and prices. The model has necessitated the company to maintain supply chains
more flexible and integrate interruption risk management into all facets of its supply chain
operations (Sherman, 2013). Disruptions in the global supply chains as a result of risks have
become the main focus in private and public matters. Supply chain risks involve any danger of
disruption to the smooth functioning of the supply chain (Brindley, 2017; Heckmann, Comes,
and Nickel, 2017).
Recommendations
In order to address the supply chain risks associated with disruption, Apple should integrate both
push and pull strategies. These decisions define the technological and infrastructural dimensions
that guide the levels of forecasting and estimates of sales. The principles of the supply chain
make it imperative for organizations to assess the influence the corporate strategy has on the
models and frameworks, increasing the efficiencies of facilities (Arzu Akyuz and Erman Erkan,
2010).
Apple should decentralize its warehouses. It does not make any supply chain sense for Apple's
products to be shipped to California only to be redistributed to various locations in the world.
Therefore, the logistics flow needs to be agile such that the supply chain decentralizes the