Sustainability of Supply Chain Practices at Apple Inc.

This report analyzes the sustainability of supply chain practices at Apple Inc. and evaluates the company's abilities in terms of financing and managing its supply chain. It also examines the impact of supply chain practices on the company's overall performance.

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BUSINESS LOGISTICS
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Table of Contents
Introduction………………………………………………………………………….4
A Brief Descriptive Profile of the Organization……………………………………..4
The Nature of the Company………………………………………………………….4
The Level of Competition……………………………………………………………4
Targeted Customers…………………………….…………………………………….5
Recent financial performance………………..……………….………………………5
Current Supply Chain Practices………………………………………………………6
Sustainability of the Current Supply Chain Practices…….…………………………..7
Conclusion…………………………………………….………………………………9
Recommendations…………………………………………………………………….9
References……………………………………………………………………………11

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Executive Summary
Supply Chain is essential in any company, and this is due to the fact that it is the only channel
that makes sure that customers get to use the products of a given organization. However, there
are factors that affect the sustainability of a supply chain. It is essential to note that the
sustainability of the supply chain is affected by different factors which might emanate from the
manufacturer, the supplier or the end user. A sustainable supply chain is supposed to promote a
smooth and continuous flow of goods from the manufacturer to the buyer. At the same time, it
must be within the abilities of the company in terms of financing and managing. The report will
be looking at Apple Inc. and its supply chain practices. The supply chain practices of an
organization have positive or negative effects on the company. After looking into the supply
chain practices, the report will also look into the abilities of the company in terms of finances
and management skills. The comparison will dictate if Apple Inc. has sustainable supply chain
practices or not.

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Introduction
An organization can only benefit from its products if it has an effective supply chain. An
effective supply chain makes sure that goods are smoothly moved from the manufacturer to the
consumers. Apple Inc. is a global organization that has its business and operations in Australia.
The company has proved to be one of the dominating organizations in the technology industry.
Apple Inc. has different measures and strategies in place that are used in delivering the products
to the customers. The report will be analyzing the supply of Apple Inc. with the aim of
evaluating its sustainability.
A Brief Descriptive Profile of the Organization
The Nature of the Company
Apple Inc. is an organization that deals in the manufacturing of technological devices and the
designing of technological applications. The company manufactures products like smartphones,
laptops, smart watches, iPhone, iPod, Mac, iPad, and Apple TV (Terrell, 2015). The company
does not only deal with hardware, but it is also good in software. The company designs the
operating system of some of its products, and that makes it an independent company because it
does not rely on software organizations to power its hardware. Apple Inc. is one of the few
organizations that deal with both the manufacturing of the products as well as the supplying of
the products. The strategic and famous founder of Apple Inc. is the late Steve Jobs, and he led
the organization to heights that made it one of the largest organizations globally (Terrell, 2015).
Apple Inc. applies the continuous development strategies when it comes to its products, and that
is one of the reasons why the company still attracts many loyal customers. At the same time, the
company promotes research and development, and that has made it easier for the company to be
innovative. Apple Inc. has a wide variety of goods and services to offer to the market, and that is
one of the reasons why the company is still dominating (Terrell, 2015). Competing with an
organization that has a wide variety of goods can be a challenge, and this is because if the
company loses to one competitor, it can win in other goods and services that it provides in the
market.
The Level of Competition

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The level of competition at Apple Inc. is high, and this is because of the competitors that the
company has to face. Apple Inc. is a huge organization, and that means that the organizations
that give the company a run for its money are also huge. Some of the competitors that Apple Inc.
is competing with are Samsung, LG, Lenovo, Motorola, Sony, Nokia, Palm, Dell, Microsoft,
Asus, Acer, Toshiba, among the rest (Terrell, 2015). The competition that Apple Inc. faces as a
single organization is stiff, and this is because of its products. The list of the competitors of
Apple Inc. comprises of organizations that deal with mobile phones, laptops, software, and
operating systems (Terrell, 2015). The reason behind it is because Apple Inc. is an organization
that deals with a wide variety of goods and services.
Targeted Customers
Apple Inc. is an organization that attracts a wide variety of customers. The nature of the goods
and services that an organization offers to the customers has an effect on the type of customers
the organization gets. In the case of Apple Inc. the nature of goods that the company
manufactures cuts across families and organizations (Terrell, 2015). For example, the operating
system and Mac devices are products that move organizations, and in this case, it means that the
company only targets organizations. When it comes to watches and smartphones, it is evident
that these are products that are used by people from households. When it comes to the aspect of
age, the customers that Apple targets are young people from the age of eighteen years. Therefore,
it means that any person who is above the age of eighteen years is a targeted customer of Apple
products. However, it is also essential to note that the products of Apple Inc. are also used by
people who are below the age of eighteen years. In such cases, the consent of the guardian or
parents comes in handy because the use of mobile phones is sometimes restricted by household
virtues and norms (Terrell, 2015). Therefore, in this case, the targeted customers are the parents
because they are the ones who purchase the products and at the same time, they are the ones who
choose on whether or not the children in the household can use the mobile phones or not.
Recent financial performance
In the last quarter of 2018, Apple Inc. recorded some of the best financial results, and this was
after increasing the revenue by 20% (Haslam, 2018). Comparing the challenges that the company
was going through when it came to the release of its newest model and the stiff competition from

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some of the best organizations in the market, the increment in revenue is something admirable.
Sales increase in iPhones where 46.889 million iPhones were released to the market. The
revenue increased to $62.9 billion, and this was more than the company had predicted. The
predictions of the company stood at $60 billion (Haslam, 2018). When it came to the case of
Macs, the sales were impressive, and this is because the sales increased by 3% and the revenue
that the company made was $7.411 billion.
Current Supply Chain Practices
Apple Inc. has one of the complex supply chains globally, but the supply chain practices have
been termed as the best by business analysts. The reason behind it is because their complexity
has a lot of effects on the delivery of its goods to the customers. The reason why the supply chain
practices at Apple are outstanding is that the company does not rely on one channel. In most
organizations, specialization is promoted even when it comes to the supply chain (Cheung,
Wong, Sun, Tan, and Yeung, 2018). It, therefore, means that organizations choose to deliver
goods to the customers or to use the third party suppliers to reach targeted customers. When an
organization chooses to specialize in the supply chain, the organization is exposed to many risks.
The reason behind it is because of one channel failed, the organization would not have an
alternative, and that is likely to have adverse effects on the organization.
Apple Inc. utilizes three different and essential strategies in reaching the customers. The first
strategy is delivering goods directly to the customers. Steve Jobs is one of the founders of Apple
Inc., and he is the person behind the success of the company. During his time as the CEO of the
company, he came up with strategies that helped the company to outshine other companies and
to also improve in its innovations and product delivery. One of the changes that are associated
with Steve Jobs was the invention of a supply chain strategy that would connect Apple Inc. to its
consumers. Apple Inc. works closely with shipping organizations like FedEx to make sure that
customers who order their products get them irrespective of their locations. In this case, the
company contacts the customers directly through its online shopping platform. It is here where
the customers select the goods that they want, and the company in conjunction of the shipping
partners arrange on how the goods get to the customers (Esmaeili, Allameh, and Tajvidi, 2016).
The strategy is effective, and this is due to the fact that customers are likely to have more trust in
the manufacturing organization as opposed to the third party supplier.

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The second strategy that Apple Inc. utilizes when it comes to supplying its products to the
customers is the use of its distribution stores. Australia is one of the hosts of the distribution
stores of Apple and one would think that the company is Australian and this is because some of
the crucial management and workplace decisions are made by the store managers. Apple Inc. has
established many stores in different parts of the world. The stores are only allowed and supposed
to sell products that come from Apple (Lockamy III, 2017). The company distributes its products
to the stores, and then the store staff members help in making sure that the products reach the
targeted customers. The supply chain is effective, and this is because it meets the one P of the
4Ps marketing mix (Froud, Johal, Leaver, and Williams, 2014). The customers are provided with
a place where they can access the products whenever they need them.
The third strategy is one of the most practiced strategies, and that is the use of third-party
suppliers. Apple Inc. has 785 suppliers who are present in 31 countries. Out of the 785 suppliers,
349 suppliers are based in China, and this is because China has been a huge market globally thus
attracting a lot of customers from all over the world. The third party suppliers have different
choices to make when they get the products of Apple Inc. (Lockamy III, 2017). A section of the
suppliers have their outlets, and that means that they channel the products direct to their retail
shops where the retailers sell the products to the customers. Some of the suppliers have
warehouses where they store their products waiting for orders from independent retailers.
Sustainability of the Current Supply Chain Practices
Different factors affect the sustainability of a product, practice, service, or process. The
sustainability of each of the practices employed by Apple Inc. can be determined by evaluating
the practice and analyzing the abilities of the company. In the first case, Apple Inc. supplies its
products directly to the customers by using its online platform. The sustainability of the strategy
of using the online shopping platform can be evaluated from various perspectives, and they
include; the ability to reach many customers, the ability to manage and operate, and the ability to
finance (Heracleous, 2013). When it comes to the ability to reach many targeted customers, it is
essential to understand the customers of Apple Inc. Apple Inc. is an organization that targets
smartphone and laptop users, and this means that these are people who are exposed to the
internet (Lockamy III, 2017). The fact that the online platforms increase the customers means
that the strategy is sustainable and this is because it can redeem its value by increasing sales.

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Sustainability is also dictated by the ability to manage and operate. Apple Inc. is also a tech
organization, and that means that it has some of the best specialists in designing and managing
websites. From this context, it is evident that the strategy is sustainable and this is because the
company has intellectually empowered persons to make sure that all operations and processes are
efficiently conducted (Gonzalez-Padron, 2016). When it comes to financing the online selling
platform, it is no doubt that Apple Inc. is a financial giant who would see no problem in
financing the operations of a website.
The sustainability of the second practice which is the use of distribution stores can be analyzed
by looking at the ability of the company to run them effectively. The financial aspect of Apple
cannot be questioned when it comes to establishing the stores, and this is due to the fact that the
company has been making profits. The demand for Apple products is responsible for making
sure Apple products not to stay for long in the shelves before there are sold. Therefore, as far as
the aspect of funding the outlets is concerned, Apple Inc. has the ability to make the stores
operational for a long time (Lockamy III, 2017). The management of s store or business dictates
if it will last for long or not. Apple Inc. has some of the best professionals, and that means that
the company cannot run out of professionals who have the ability to manage the outlets. The
users of a product also have an effect when it comes to the sustainability of supply chain
practices. It is essential to note that a supply chain cannot be complete if the products do not get
to the user (Kumar, Teichman, and Timpernagel, 2012). For the company to be able to afford all
processes of the supply chain, the customers must buy the products so that the company can
make profits. As far as this aspect is concerned, the customers of Apple Inc. are loyal and always
eager to buy the products if the company. The customers buy in their large numbers, and that
means that they promote sustainability by increasing sales which later affect the profits
positively thus giving Apple Inc. resources to sustain its supply chain practices. Therefore, the
sustainability of the distribution stores cannot be doubted or questioned because the company has
all it takes to sustain the practice.
The use of third-party suppliers is affected by two factors as far as the sustainability aspect is
concerned (Kumar, Teichman, and Timpernagel, 2012). The first factor is money to take care of
the suppliers. Third party suppliers are in business to make money, and that means that Apple
must be in the best position to afford their services. Apple has been making profits, and that

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means that the company is in the best position to afford the services of the suppliers (Lockamy
III, 2017). The second factor is the flow of goods. Suppliers are attracted to organizations that
have placed themselves in a favorable position in the market. Therefore, it means that if the
goods of a particular company have high demand, more suppliers would be interested in working
with the company. The reason is that there will be a continuous flow of orders and there will be a
ready market. The products of Apple Inc. are on high demand, and that means that suppliers do
not struggle when it gets to the point of distributing the goods. The suppliers also dictate the
sustainability of manufacturing company practices (Gouda and Saranga, 2018). When a supplier
has a reason to stay for longer, and the reason is motivated by the manufacturer, it means that the
manufacturer has strategies in place that promote the sustainability of the supply chain.
Conclusion
An organization that has invested more in its supply chain stands a chance to be successful. The
reason behind it is because success comes when an organization is able to reach its consumers at
the time that they need the products of the company most. Apple Inc. is a globally recognized
organization but it has some of its outlets in different parts of the world, and Australia is one of
the nations that play host to the company. Apple Inc. has proven to have effective strategies
when it comes to the supply chain. The company has been using three different strategies but at
the same time to increase channels of distributing the products to the consumers. Apple Inc. is
still using the supply chain strategy that was discovered by its founder the late Steve Jobs. The
company reaches its customers directly in this strategy. The company also uses its outlets to
reach its targeted customers. Apple Inc. has also been utilizing the services of the third party
suppliers, and they have helped the company to reach a lot of customers in over thirty-one
countries. Looking at each of the practices, it is evident that Apple Inc. has the ability to sustain
each one of them. The company has proved to be a financial giant and a source of some of the
most innovative and creative professionals. Therefore, it is evident that in terms of finances and
human resource, Apple Inc. is in the best position to sustain all its marketing practices.
Recommendations
Apple Inc. has proven that it is an organization that is rich in strategies when it comes to
supplying its products to the customers. However, there are different ways in which Apple Inc.

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could make its supply chain better and bigger. The use of online selling platforms has been
promoted by Apple, but in this case, the company only sells its products by using its website.
Online shopping is a trend in the modern world, and many people are purchasing goods from the
comfort of their homes and place of work. Apple cannot reach all potential buyers using its
website alone. The company should identify some of the most prominent organizations and work
with them to distribute its products. The advantage of involving other platforms is because they
have specialized in that and they reach a lot of customers compared to Apple's website. Some of
the organizations are Jumia, Alibaba, and Amazon. The online shopping organizations attend to
thousands of buyers in a single day. If Apple could partner with these organizations, it would
increase its sales by a significant percentage because the customers who are loyal to these
platforms might also be convinced to purchase the products of Apple Inc.

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References
Cheung, S.Y., Wong, C.K., Sun, Y., Tan, Q.Y. and Yeung, J.H., 2018. Adopting information and
communication technology in green supply chain management. Advanced Science Letters, 24(7),
pp.4900-4903.
Esmaeili, M., Allameh, G. and Tajvidi, T., 2016. Using game theory for analysing pricing
models in closed-loop supply chain from short-and long-term perspectives. International Journal
of Production Research, 54(7), pp.2152-2169.
Froud, J., Johal, S., Leaver, A. and Williams, K., 2014. Financialization across the Pacific:
Manufacturing cost ratios, supply chains, and power. Critical Perspectives on Accounting, 25(1),
pp.46-57.
Gonzalez-Padron, T.L., 2016. Ethics in the supply chain: Follow-up processes to audit
results. Journal of Marketing Channels, 23(1-2), pp.22-33.
Gouda, S.K. and Saranga, H., 2018. Sustainable supply chains for supply chain sustainability:
impact of sustainability efforts on supply chain risk. International Journal of Production
Research, 56(17), pp.5820-5835.
Haslam, K., 2018. Apple Q4 2018 financial results. Available at
https://www.macworld.co.uk/news/apple/apple-financial-results-3581769/
Heracleous, L., 2013. Quantum strategy at Apple Inc. Organizational Dynamics, 42(2), pp.92-
99.
Kumar, S., Teichman, S. and Timpernagel, T., 2012. A green supply chain is a requirement for
profitability — International Journal of Production Research, 50(5), pp.1278-1296.
Lockamy III, A., 2017, July. An examination of external risk factors in Apple Inc.’s supply
chain. In Supply Chain Forum: An International Journal (Vol. 18, No. 3, pp. 177-188). New:
York: Taylor & Francis.
Terrell, E., 2015. Apple Computer, Inc. Available at
https://www.loc.gov/rr/business/businesshistory/April/apple.html

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