Supply Chain Management of Apple Inc.

This report discusses the issues in the supply chain management of Apple Inc. and provides analysis on supply, operation, information, integration, and sustainability. It also suggests improvement programs for Apple Inc.

Running head: SUPPLY CHAIN MANAGEMENT
Supply Chain Management
Name of the Student
Name of the University
Author Note
Website URL: https://sites.google.com/view/supplychainmanagement-apple/home

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Executive Summary
The main aim of this report is discussion regarding the issues in the supply chain
management of Apple Inc. Currently, the Apple Inc. is dependent on various of other
electronics parts manufacturers for successful completion of their products. Thus perfect
supply chain is very much important for them. In this article, first the supply related issues
has been discussed. With that other important issues in the supply chain is also discussed in
this context which includes operation issues, information issues, integration issues and the
sustainability related issues. Procurement and supply chain analysis of the organization has
been also discussed in this report. Some improvement programs for the Apple Inc. has been
also discussed in this context.

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Table of Contents
Introduction:...................................................................................................................3
Vision, Mission and Strategic goals of Apple:...............................................................3
Supply Analysis:............................................................................................................4
Operation Analysis:........................................................................................................5
Information Analysis:.....................................................................................................6
Integration Analysis:......................................................................................................7
Sustainability Analysis:..................................................................................................8
Procurement and Supply Chain analysis of Apple:........................................................9
Improvement Programs:...............................................................................................10
Assisting Apple:...........................................................................................................11
Conclusion:..................................................................................................................12
References:...................................................................................................................13

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Introduction:
The supply chain management or the SCM is considered as some crucial activities
that are important for controlling, planning and execution of the flow of the products. The
supply chain starts from acquiring of the raw materials to production of the desired products
and finally in this supply chain the actual product got delivered to the final customer
(Giannakis & Papadopoulos, 2016). The main aim of the supply chain processes is creating
streamline and a cost effective product so that it can be delivered to the customers in most
possible cost effective way.
The supply chain management includes integrated planning and execution of some
crucial processes that are very much important for optimization of the flow of the materials
financial capitals and information is such of the areas which consisting sourcing, demand
planning, inventory management, production and storage. For the processes of supply chain
both of the specialised software and business strategy is required to gain an effective market
competition in the market.
Vision, Mission and Strategic goals of Apple:
The current vision of the Apple Inc. is believing on the face of the earth for creating
great products which are not changing. Considering the mission of Apple, the main mission is
providing the best user experience to the customers of them through utilising the innovative
services, software and hardware. Considering the current vision and mission statement of
Apple the main strategic goal is spearheads the innovation. Apple is currently looking for
utilising renewable type of energy sources to their businesses to make business of them more
sustainable. Also, the Apple has taken the environmental responsibility by eliminating toxic
type of products in their production related activities.

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Supply Analysis:
In the current context it has been analysed that main products which need to be
managed by the procurement department of the Apple Inc. is the iPhones department
(Christopher, 2016). The iPhone sector is most important sector for the business of Apple Inc.
as most of the revenue of the organisation comes from this sector. For perfect business
operation and business procedures management of the iPhone sector by the procurement
department is very much important in this context.
In the iPhones there are various of important parts and for this parts, Apple is
dependent on various of other organizations. In this list of organization the most important
organization are the Qualcomm, Samsung and Glu Mobile. Here Qualcomm provides modem
for Apple, where Samsung provides displays for the iPhones. Glu Mobile provides some
important hardware to the Apple.
The current supply market for the Apple is quite well and most of the suppliers are
happy in this business process among them. Apple currently uses only sourcing type of
business where it depends on the other manufacturers of the service and delivery of the parts
of the iPhones. In this case sourcing is important competiveness and for the cost structure of
the large businesses. Due to sourcing, Apple is capable of high amount of parts purchase and
for that production of the iPhones has been increased.
The current supplier section by the Apple is very well as all the selected companies
are one of the best in their corresponding business area. Also, development practices and
programs in this organizations are well defined.
Here Apple is facing supply related issues in two of the most important parts which
are the displays and the processors. Here the main issue regarding the display is that shortage

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of the main supply and modem supply is facing issues due decreased business relationship
among the organizations.
Operation Analysis:
The current sales market for the Apple Inc. is the mobile device consumers
worldwide. One of the main reason that Apple is a huge company is that its presence in
almost every country in the world. Through this a large amount of customers has been
targeted by Apple. The current key customer in this context for the iPhones of the Apple are
the electronics consumer and the smartphone consumers (Mangan, Lalwani & Lalwani,
2016). In the case of gender Apple is more focused on the males rather than the females. Here
the targeted age group is the 35-44.
Demand forecasting is very much important for the organizations for a better supply
of the products to the market. Different organizations uses their different styles of demand
forecasting techniques. The Apple forecasts the demand of its iPhones by analysis of the past
sales details of their iPhones. With the previous sales records in this aspect Apple also
analyses the current market environment. By analysis of these two factors, Apple is capable
of demanding the forecast of the sales accurately. Considering demand forecasting for other
organization, it is quite different from the Apple (Darr, 2019). This happens as business style
of those organization is different and for that different forecasting is important.
The inventory management techniques for Apple is one of the best inventory
management system. To achieve this the Apple has implemented a centralised type of
warehouse for their products (Zhang, Liang & Gao, 2017). The products were distributed all
over the world by the 154 key supplier of Apple. Also, a strong and strategic relationship is
managed by the Apple with its vendor. By this effective inventory management can be

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achieved. Different products is managed through different kind of inventory management
system as targeted market for different products are different.
Currently there is a demand related issue in the supply chain of Apple. There is a
shortage in the supply chain of the displays. Recently after the launching of iPhone XR,
iPhone XS and iPhone XS max apple did not received positive feedback from the market.
Currently, their overall sales are decreasing and for that issues are there in the inventory
management system.
Information Analysis:
The bullwhip effect is a typical type of channel of distribution through which the yield
supply chain efficiencies are forecasted. It mainly refers to the increased swings in the
inventory for responding to the demand of the customers. One of the major reason that the
bullwhip effect occurred within the supply chain of Apple due to their announcement of
iPhone XR, XS and XS Max. This phones failed to become as successful as their predecessor.
Due to this false supply claim is created in the organization and also there was a fluctuation
in the demand (Schoenherr & Speier‐Pero, 2015). Here advanced software technologies can
be used as the remedies of bullwhip effect. Due to the bullwhip effect in this context Apple
faced several problem in the manufacturing and in the inventory management.
In this context, Apple has used various of technologies for management of the supply
chain within the organization. All of this technologies helped the Apple to overcome the
issues regarding various of challenges in the supply chain management. In this case, the key
technology that is used by the Apple for the supply chain management is the warehouse
management system (Mangla et al., 2019). Through this technology Apple was able to track
its central warehouse easily. Through this technology the supply chain capability of Apple
increased as tracking each and every components become very much easy in this case.

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In this case the main practices which is used for the collaborative nature in the
processes of supply chain are the encouragement in innovation and establishment of the team
specific goals. Team goal establishing is one of the major factor in this case. This can be
implemented by proper communication among the employees of the organization. This
practice can improve the supply chain of the organization.
Integration Analysis:
In this case for Apple, first the sourcing is done at United States. Following that
assembly of the parts is done in China. Then all the product goes for the warehouse storages
and from there it goes to the distribution channels (Coyle et al., 2016). In case any type of
defective product the product it taken return from the consumer’s end.
(Figure 1: Supply Chain Map of Apple)
The nine step framework for supply chain integration are:

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1. Definition of problem and plan.
2. Creating Baseline Model.
3. Validation of Baseline Model.
4. Quick wins and quantify of key drivers.
5. Scenario identification and creation.
6. Scenario optimization.
7. Iterate and consolidate.
8. Driving the change.
9. Creation of reputable process.
Considering the current supply chain of the Apple it can be actually considered as a
Triple A supply chain (Ayers & Odegaard, 2017). This supply chain supports all of the
adaptability, agility and the alignment that are very much important for the business process
of the organisation.
Sustainability Analysis:
The main procurement which is currently used by the procurement of the Apple are
spend under management, procurement ROI and the procurement cycle time (Lockamy,
2017). The supply chain sustainability practices that are used by Apple is mapping the supply
chain, communicating the expectations and developing capacity building and training
programs.
From the analysis of the Apple Inc. it has been assessed that the sustainability
practices for the supply chain management has been perfectly implemented and integrated
across the organization. Perfect sustainability has been implemented within the organization
that they will be able to create new products with not many of wastages (Fleming, 2019).

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Through this way, Apple has successfully integrated sustainability in their supply chain
model.
Procurement and Supply Chain analysis of Apple:
Considering the procurement of Apple it is quite effective strategy which helped the
organization to sold millions of iPhones. The main procurement strategies which has been
implemented by the Apple are the:
 Risk Diversification: Here the growth of the iPhone started from a cheaper model
and from that base model Apple increased their complexities of their design and with
that Apple frequently revisited supply chain partners and the supply chain strategy. In
this case it has been assessed addition of a new supplier will be very much beneficial
for the organization as it will be providing better flexibility to them and by using that
they will be able to react faster in case of supply chain disruption (Stadtler, 2015).
Through this a strong commitment has been taken towards an ethical and safe process
of manufacturing.
 Management of Capacity: Currently there are various of market competitors of
Apple including Google and Microsoft. Google uses android for their phones which is
available in open source. The iOS of Apple is linked closely with the design of the
hardware, thus it is important to manage the capacity issue of the handset as well.
Thus to get success in big markets Apple needs to increase the overall production.
Utilising a second supplier will be helpful in such cases (Fujita & Hamaguchi, 2016).
 Innovation of Supplier: A new supplier might be willing to invest in the capital to
fund the growth. Thus for increment in the share of the business of the Apple,
operational efficiencies need to be improved. This will differentiate Apple from its
market competitor.

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From the supply chain analysis of the Apple it has been assessed that these are having
various of primary activities related to it. The main primary activities are the:
 Inbound Logistics: Apple is very much popular brand in the current context. Due to
this reason Apple is consisting many of the top suppliers which makes the supply
chain of the Apple very much flexible. Also, Apple is consisting very much high
bargaining power over its suppliers. Also, Apple has set a quality standard for their
suppliers to that Apple will be able to make only high quality of products.
 Operations: Currently, manufacturing operations of iPhones is done several of places
across the globe and China is biggest of them. With China there are also some Asian
country also in which manufacturing of the iPhones is done. As labour cost in the
Asian country is quite low manufacturing cost for the Apple reduces. Also, Apple is
trying to remove toxic type of substances from the manufacturing units for better
sustainability.
 Outbound Logistics: Currently, Apple is consisting a huge channel of distribution of
both the indirect and direct channels. It can be found in both the online and in the
offline markets. Also, the distribution channel of Apple is increasing more. Due to
this fact Apple is consisting a better supply chain management.
Improvement Programs:
The supply chain of Apple can be improved in various of ways. The main processes
through which improvements can be done are discussed below:
 Cost awareness can be raised within Apple for a better supply chain management.
 Organizational transparency need to be improved more for the Apple to get a better
supply chain management (Meixell & Luoma, 2015).

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 The return management need to be improved in this case for Apple for a supply chain
management.
 ERP systems are one of the most crucial solution for improving overall progress of
the organization. Here an effective ERP system can help Apple to improve the supply
chain management of them.
 Vendor plays an important role for perfect management of the supply chain. Thus
Apple need to ensure that the vendors performing very well. For this factor Apple
need to closely monitor the performance of the employee and through this the supply
chain of the Apple can be increased.
 The ERP system can be also used for management of the inventory in real time.
Through this handling of inventory and the information regarding it will become very
much easy (Wang et al., 2015). Thus in this case also better supply chain management
can be gained.
 Standardization of the processes can done in this case to bring improvements in any
type of supply chain management. This will increase the efficiency of the supply
chain management while the cost and time is decreased. Standardized system of tools
can be also implemented in this case for increasing encourage, accuracy and the
teamwork. Thus the supply chain will be improved in this case.
Assisting Apple:
The above discussed improvement programs will assist Apple to fulfil organizational
vision, mission and strategic goals. Here it has been assessed that ERP system bring
improvements in the supply chain management and help to make a sustainable supply chain
management. Through the implementation of ERP system the strategic goal of the Apple Inc.
can be fulfilled (Shi & Ma, 2016). Also, in this case the standardization of the processes can
help the Apple to achieve vision statement of the organization. The mission statement of the

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Apple Inc. can be achieved in this case by cost awareness and organisational transparency in
this case. In this case the cost awareness should be there within the employees of the
organisation.
Conclusion:
From the above discussion it can be concluded that Apple Inc. is currently facing
various of problems regarding the supply chain within the organization. Here various of
issues that are present in the current supply chain management has been discussed. Here, first
the supply related issues has been discussed. Following that operations related issues has
been discussed in this report. Following that, integration related issues and information
related issues has been discussed within this context and lastly, sustainability issues within
the organization has been discussed. With all of this factors, Apple’s supply chain model and
the procurement has been discussed within this report. Also, improvements regarding the
supply chain has been discussed here and how this can assist the Apple to achieve vision,
mission and strategic goals has been discussed.

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References:
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Christopher, M. 2016. Logistics & supply chain management. Pearson UK.
Coyle, J. J., Langley, C. J., Novack, R. A., & Gibson, B. 2016. Supply chain management: a
logistics perspective. Nelson Education.
Darr, W. 2019. Advanced Issues of Procurement Management. tredition.
Fleming, Q. W. 2019. Project procurement management: contracting, subcontracting,
teaming. Project Management Institute.
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Inclusiveness and risks. Papers in Regional Science, 95(1), 81-100.
Giannakis, M., & Papadopoulos, T. 2016. Supply chain sustainability: A risk management
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Lockamy III, A. 2017. An examination of external risk factors in Apple Inc.’s supply chain.
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