Table of Contents INTRODUCTION...........................................................................................................................1 MAIN BODY...................................................................................................................................1 Supply Chain Strategies implied by Apple.................................................................................1 Aligning supply chain with structure of company structure.......................................................3 Supply chain planning at Apple Inc............................................................................................4 Supply chain map of Apple Inc...................................................................................................5 Models of Supply chain..............................................................................................................7 CONCLUSION................................................................................................................................9 REFERENCES..............................................................................................................................10
INTRODUCTION This report is based on Apple Inc company which is American multinational technology company, headquarter of the company is in Cupertino, California, Apple company designs and develops and sell the computer software and hardware and provide the online services. in which I will be finding out which supply chain they are using and I will be focus in more details about their flexibility. Supply chain management is a process which denotes flow of goods and services in an organisation. It comprises transformation of raw material to finished products which are ready to sell in the market (Willis, Genchev and Chen, 2016). I will be comparing with their rivals Samsung which is the South Korean multinational company, headquarter of the company is in Suwon, South Korea. It is the world's manufacturer of consumer electronics. Flexibility refers to organisation's ability to adapt different scenarios as per changing business environment whereas flexibility in the supply chain is also an ability to adapt changes and flexibility between all the partners in the chain such as, suppliers, carriers and third-Party company. MAIN BODY Supply chain Management Supply chain management includes number of activities that required to planning and controlling the flow of goods, from transformation of raw material to final goods which is ready to distribute in the market to final customer. Flexibility in supply chain enhances ability of business process by enabling opportunity to enhance quality, performance, cost and time of activities. General components of flexible SCM comprise adaptability which denotes adjustment in design of SCM for meeting structural shifts and modifying supply chain networks and technologies. In addition, flexibility in SCM aim at aligning of activities with the motive of managing incentives with partners which helps the organisation in improving performance. Also, flexibility in SCM assists the company in responding to short terms challenges. Supply chain strategy Supply chain management build and implement the strategy that effectively manage all the members of supply chain which is - suppliers, manufactures, distributors and customers, for the objective of lower the cost of production and distribution that meet the customer's need (Supply Chain Management (SCM),2019). 1
Supply Chain Strategies implied by Apple Apple is the world largest smartphone company, which is American multinational technological company that designs, develop and sells consumer electronics, computer software and online services and also produced the hardware products to customers with the help of flexible and unique supply chain and inventory management technique in the organisation. Apple's supply chain management is the world's best supply chain. (Ciccullo and et.al, 2018). Apple's supply chain is the combination of science and the subject, in the science it calculates the flexibility, advantage and disadvantage and the quantity of the goods. Supply chain of the Apple analyse the demand of the product in the market on the basis of this production is being start according to demand. All the functions the company are linked with each other and efficient production of the goods is based on the effective supply chain, for this company invest on the 2 Illustration1: Score of Apple in supply chain (Source:Apple: A Global Leader in Supply Chain Management,2015)
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updated technology and linked all the functions to the supply chain for flexible operations in the organisation (Fayezi, Zutshi and O'Loughlin, 2017). Push supply chain strategy Apple uses the push-based strategy to sustain the relationship with the customers and also collaborate with the partners and all the members who play vital role in the supply chain of the company. This give the flexibility to supply chain of the Apple Company that they can make their own supply strategies from the raw materials to final goods and distribution of the products in the market and because of the flexibility in supply chain can make changes in their supply strategies. When the demand is high then due to supplies problem, relation between company and customers loose. So, with this push-based strategy Apple company analyse the demand and need of the customer and provide flexibility to the production to make changes and design the product to meet the customer needs (Kamalahmadi and Mellat-Parast, 2016). This strategy helps the Apple in smooth running of the supply chain strategy and management and give flexibility to the manufacturing of the products and lower the cost which is the ultimate aim of the company to provide the products at affordable price (Willis, Genchev and Chen, 2016). As opposed to Apple,SamsungBuild the relationship with their supplier partners rather than the customers. It helps the Samsung to build mutual trust and create a transparent process in operating with only suppliers. By this Samsung cannot build the relation with the customers and not able to find out the customers' demand and quantity of the products in the market that can help the Samsung in the smooth production operation. With this Samsung provide the flexibility to suppliers that they supply the products to end customers by their own way and failed to provide flexibility in the work place and also failed to meet the demand of the customers. Aligning supply chain with structure of company structure The Apple Company use the strategy of aligning the supply chain strategies in this, supply chain strategy which is used by the company must be linked with the company structure. If the supply strategies are not flexible and match with the company structure then the whole system of the organisation will be disturbed and again have to make new strategies, because alignment supply 3
chain enables the synchronisation of the flow which include physical and information flow and align the internal and external stakeholders in an action to execute and deliver the value.Apple has the flat structure and follow flexible supply chain in which company gives the flexibility and the preference to all the employees in all the location therefore company aligns their strategy to the company structure for the smooth running of the supply chain process and give the freedom to change their flexible strategy of the company that helps the company in inflow and out flow of the Apple products (Manders, Caniëls and Paul, 2016). In contrast with the Apple,Samsungprepares different strategies for both, company structure and for the supply chain. In this sometime supply strategy does not match with the company structure (Srinivasan and Swink, 2018). Planning of Supply chain in Apple Inc. Apple purchases their raw materials from various suppliers and to save the time and money Apple ships that components via air that give the flexibility of time and money, to its assembling plants in China and from china it distributes their products direct to the customers who are keen to buy Apple products. Apple use such a new technology to give the flexibility in the production and packaging of the products and make them attractive. And for giving the flexibility in testing, conduct the product testing and market research before pre-launch the product to resolve the backlogs and for demand forecasting that give the flexibility in the production (Apple: A Global Leader in Supply Chain Management,2015). 4
Supply chain map of Apple Inc. There are various supply channels including retail stores and distributors. Apple purchase the components from various sources manufacture them in their assembling plant in china then to products is intermediate to central warehouse from china and then distribute their products to the end users through online, retail stores. This online distribution provides the flexibility to company that they can sell their phones direct to warehouse to the customers and customers can send the products back to the nearest apple store when they found something wrong in the product (Apple: A Global Leader in Supply Chain Management,2015). 5 Illustration2: Supply chain planning at Apple Inc. (Source:Apple: A Global Leader in Supply Chain Management, 2015)
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Key actors that contributing to the success of Apple's Flexible supply chain- Flexibility in the supply chain management is to save the time and money that it ships the materials via air. It has only one central warehouse instead of various number of warehouses which created the problems and also time consuming, had to shipped products to number of location but with the one warehouse give the flexibility in distribution and saving time and easy to manage. It furthermore shrinks the number of important suppliers involved in manufacturing, shipping and storing which consumed high cost and difficult to manage, this give the flexibility to manage staff and transport by limiting the supply chain members. Create synchronisation between the customers, their own stores and central warehouse for efficient operations and to make it cost effective. (Simchi‐Levi, Wang and Wei, 2018). 6 Illustration3: Supply chain map of Apple Inc. (Source:Apple: A Global Leader in Supply Chain Management,2015)
Comparison of Apple flexibility with Samsung Flexibility (Apple)Flexibility (Samsung) In industry which is focused to metrics of high demand uncertainty and where market cost is the first top priority. Apple, such industry's follow supply chain model. This supply chain models are orientedtoresponsiveness,therearethree models: •The“agile”supplychainmodel-This supply chain is usually applied by the companies which manufacture the products on the basis of unique specification demand of the customers and their demand of the products is unpredictable. Thismodelonlyprovidestheflexibilityin specialised production and those industry which ischaracterisedbyunpredictabledemand Managers only focus on the ability to designing and manufacturing process (Esmaeilikia and et.al, 2016). •The“custom-configured”model-This modelissuitableforthecompanieswhich produce multiple products and where unlimited configuration is required. It is high correlation between asset cost and total cost. And where goods configuration is accomplished at the time of assembly process where differentiated goods are assembled as per buyer's specifications. This model helps in providing flexibility only in the manufacturing of the different products and have to make different strategies for different product. In this type of company different parts of the However,Samsungfollowsthecustom- configured supply chain model in which different partoftheproductsrequiredunlimited configuration on the basis of the specification of the customers. It is helpful for the company as it configures multiple products and its part, they can identify the problem in each part of the product and can resolve it easily. But it is very time-consuming model which Samsung applies, with this model Samsungwillfailtomeettheneedofthe customers within short period. As the smartphones are used by every individuals and demand of the smartphones are very high, if Samsung will fail to fulfil the demand of the customers it will affect the Samsung turnover and can lose their customers and also profit. It also creates theproblem in supply chain that it is time consuming so the product will not reach to the warehouses then distributors on time and therefore it can spoil the relationship with suppliers and distributors as well (Rezaei Somarin and et.al, 2018). 7
Illustration4: Samsung mobile business (Source:Samsung's Mobile Business Is Half the Size of Apple's,2019) products are configured according to customer’s specification. •The “flexible” supply chain model- This SCM model is suitable for the companies where isalwayshighdemandoftheproducts (SrinivasanandSwink,2018).Thismodel characterisedthereconfigureofinternal manufacturing process to meet the need of the customers or to solve the problem. This model shows, ensure to provide the flexibility by having the extra capability of serious resources, suitable strength in development of the process which is easilyreconfigurableandprovidetheflexible supply chain that helps to make changes in the strategies of the company (Flexible Supply Chain, 2019). CONCLUSI ON Fromthe above study it canbe concluded thatevery businesshas itsown supplychain management 8
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system. Apple is the leading company in managing supply chain it is involved in the process of supply chain planning in which all the activities that should be carried out in managing supply chain, takes place such as checking inventory level present now, launching of new software, introducing another network of supply chain etc. Also, from above study it can be understood that an organisation can have its supply chain in different countries because it can have warehousing unit in different countries, manufacturing unit in different country and distributing unit in another country. 9
REFERENCES Books Ciccullo, F. and et.al, 2018. Integrating the environmental and social sustainability pillars into the lean and agile supply chain management paradigms: A literature review and future research directions.Journal of Cleaner Production.172.pp.2336-2350. Esmaeilikia, M. and et.al, 2016. Tactical supply chain planning models with inherent flexibility: definition and review.Annals of Operations Research.244(2). pp.407-427. Fayezi, S., Zutshi, A. and O'Loughlin, A., 2017. Understanding and development of supply chain agility and flexibility: a structured literature review.International Journal of Management Reviews.19(4). pp.379-407. Kamalahmadi, M. and Mellat-Parast, M., 2016. Developing a resilient supply chain through supplierflexibilityandreliabilityassessment.InternationalJournalofProduction Research. 54(1). pp.302-321. Journals Manders, J. H., Caniëls, M. C. and Paul, W. T., 2016. Exploring supply chain flexibility in a FMCG food supply chain.Journal of Purchasing and Supply Management.22(3). pp.181- 195. Qamar, A., Hall, M. A. and Collinson, S., 2018. Lean versus agile production: flexibility trade- offs within the automotive supply chain.International Journal of Production Research. 56(11). pp.3974-3993. Rezaei Somarin, A. and et.al, 2018. Flexibility in service parts supply chain: a study on emergencyresupplyinaviationMRO.InternationalJournalofProduction Research.56(10). pp.3547-3562. Simchi‐Levi, D., Wang, H. and Wei, Y., 2018. Increasing supply chain robustness through processflexibilityandinventory.ProductionandOperationsManagement.27(8). pp.1476-1491. Srinivasan, R. and Swink, M., 2018. An investigation of visibility and flexibility as complements tosupplychainanalytics:Anorganizationalinformationprocessingtheory perspective.Production and Operations Management.27(10). pp.1849-1867. 10
Willis, G., Genchev, S. E. and Chen, H., 2016. Supply chain learning, integration, and flexibility performance:anempiricalstudyinIndia.TheInternationalJournalofLogistics Management.27(3). pp.755-769. Online Apple:AGlobalLeaderinSupplyChainManagement.2015.[Online].Available through<http://smbp.uwaterloo.ca/2015/06/apple-a-global-leader-in-supply-chain- management/> FlexibleSupplyChain.2019.[Online].Available through<http://www.leanmanufacture.net/leanterms/flexiblesupplychain.aspx> Samsung'sMobileBusinessIsHalftheSizeofApple's.2019.[Online].Available through<https://www.statista.com/chart/8319/samsung-vs-apple/> SupplyChainManagement(SCM).2019.[Online].Available through<https://www.investopedia.com/terms/s/scm.asp> 11