Examination of the sustainability of the Apple iPhone supply chain in China
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This dissertation explores the sustainability of the Apple iPhone supply chain in China. It includes a literature review, identification of upstream and downstream players, and analysis of macro-environment factors using PESTLE analysis.
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Examination of the sustainability of the Apple iPhone supply chain in China 1
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Abstract The current project is tending to base on the topic of Examination of the sustainability of the Apple iPhone supply chain in China for which an investigation is made on the Apple organisation that is world largest technological company. The main aim of current study is to study how sustainable Apple's the supply chain is from the angle of analysing the macro environment in China. Further, the set objectives for current investigation includes conducting a literature review with purpose of increasing understanding regarding the sustainable global supply chain along with identifying the Apple iPhone supply chain approaches and model. Further, the main purpose of current study also comprises of recognising the upstream and downstream players in the Apple iPhone supply chain including their geographic location. Along with this, the main boundaries and themes of current study comprises of the identification of the how many businesses, have the supply chain in China together with identifying and analysing the macro-environmentfactorsinChinausingPESTLEanalysis,whichisrelatedtothe sustainability of the Apple iPhone supply chain in China. The methodology that has been applied within current study is based on qualitative nature of method that supports in-doeth and more detailed information for better analysis and meeting of setting objective. Along with this, to complete current study in most cost and time efficient manner use of only secondary form of research has been made. The main finding of current study comprises of analysis about the importance of sustainable supply chain. Further, the solution for having improved sustainability in supply chain comprises of making use of efficient machinery and vehicles along with keeping a check and control on carbon footprints and other wastage in supply chain. Contents Abstract............................................................................................................................................2 1. Introduction..................................................................................................................................4 1.1 Context...................................................................................................................................4 1.2. Research problem and questions..........................................................................................6 2
2. Literature review on the topic: “Sustainable supply chain”........................................................7 To conduct a literature review with purpose of increasing understanding regarding the sustainable global supply chain...................................................................................................8 To recognise the upstream and downstream players in the Apple iPhone supply chain including their geographic location...........................................................................................12 3. Apple iPhone approach to supply chain....................................................................................13 4. How many businesses have supply chain in China?.................................................................14 5. Current situation in China using PESTLE analysis that related to the sustainability in the Apple iPhone supply chain............................................................................................................16 Political Factors.........................................................................................................................16 Economic factors.......................................................................................................................17 Social Factors.............................................................................................................................17 Technological Factors................................................................................................................18 Environmental Factors...............................................................................................................18 Legal Factors.............................................................................................................................19 6. Research Methodology..............................................................................................................19 7. Secondary Data Analysis...........................................................................................................21 What is the sustainable global supply chain?............................................................................21 What is the Apple iPhone supply chain approaches and model?..............................................21 What are the upstream and downstream players in the Apple iPhone supply chain including their geographic location?..........................................................................................................22 How many businesses have the supply chain in China?............................................................22 What is the macro environment factors in China using PESTLE analysis, which is related to the sustainability of the Apple iPhone supply chain in China?.................................................22 8. Findings, discussion and recommendations..............................................................................23 9. Conclusion.................................................................................................................................26 REFERENCES..............................................................................................................................27 3
1. Introduction 1.1 Context Background of the research Sustainabilityemphasisonmeetingtherequirementsofthecurrentwithout compromising the capability of future generations to meet their requirements. Supply chain introduces to the activities needed by the business to deliver their products or services to the purchaser. A supply chain is emphasis on the main activities in their organisation needed to convert raw materials through to finished services or goods (Arora and et. al., 2021). Along with this, sustainability in supply chain has direct impact on supply chain of company that can makes in promoting fair labour practices, anti-corruption practices, environment progress and human rights. AppleisgivenAmericanmultinationaltechnologycompanyforthisdissertation. Company is specialising in computer software, consumer electronics and online services. Apple is the largest technology company that was founded in 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne (Is Apple’s Supply Chain Really the No. 1? A Case Study, 2013). There are different products sell by Apple i.e. iPhone, iPod, Apple TV, watch etc. These are main products sell by Apple with purpose of increasing customer base. Along with this, supply chain of Apple is its use of numerous suppliers for the same components. Company has a wide network of third party suppliers within its supply chain. In accordance to recent investigation, Apple has around 785 suppliers within 31 countries worldwide. In this 349 of are based in China. Figure1: Apple's Supply Chain 4
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(Source: Apple's Supply Chain, 2018) From the above mentioned graph, it has been interpreted that Apple is a number one supply chain company. There are different countries where Apple has to sourcing their products or services i.e. United States, China, Europe and other Asian countries. China is a main country where Apple manufacture their products (Wang and et. al., 2021). Main distributions of Apple are online store, retail stores, direct sales force and wholesalers, retailers and network centres. Apple is well famous for its design and innovation. This is a world leader in innovation, product development and design, branding, software ecosystem and marketing. Apart from this, PESTLE analysis is the tool through which marketers analyse the macro environmental factors which affects the business. These are the external environmental factors. PESTLE stands for Political factors, Economic factors, Social factors, Technological factors, Legal factors, Environmental factors (Han, Goetz and Schmidt, 2021). China is a political and an economic superpower. Over the years, it has developed a number of important programmes of change as well as made great improvements within many fields. In terms of nominal gross domesticproduct,itisthesecondlargesteconomywithintheworld.Legalissuesand government regulation are main political factors that helps Apple in maintaining of sustainability of iPhone. Along with this, all factors are important in maintaining sustainability of global supply chain. Importance of the issue The research topic is important because today’s sustainability in supply chain helps businessorganisationinincreasingofcustomerbase.Therearevariousadvantagesof sustainabilityinsupplychaini.e.improvingproductivitywhilesavingmoney,reduced environment impact, improve continuity of supply, protecting against reputational damage, win more business, helps in increasing number of customers (Kudtarkar, 2020). Along with this, iPhone is the product of Apple Inc. that wants to improve their business by examine the sustainability in supply chain. If Apple not implement sustainability in iPhone supply chain within China, there are different issues that would be faced by them. These issues are higher cost of distribution, loss of product, higher possibilityof product damage, inappropriate staff behvaiour etc. Pivotal variables 5
There are two variables that are essential within a dissertation i.e. dependent variable and independent variable. In this research objective supply chain of the Apple iPhone within China is the dependent variable that is depend on sustainability. Both variables are essential in attaining researchaimsuccessfully.Therefore,bothvariablesareeffectiveinconductingcurrent dissertation successfully. Research Aim and objectives Research aim:Main aim of this dissertation is “To study how sustainable Apple's the supply chain is from the angle of analyzing the macro environment in China”. Research objectives: To conduct a literature review with purpose of increasing understanding regarding the sustainable global supply chain To identify the Apple iPhone supply chain approaches and model To recognise the upstream and downstream players in the Apple iPhone supply chain including their geographic location To identify the how many businesses, have the supply chain in China To identify and analyse the macro-environment factors in China using PESTLE analysis, which is related to the sustainability of the Apple iPhone supply chain in China. 1.2. Research problem and questions Main research problem of this research topic isthe influence of sustainability on supply chain of the Apple iPhone within China. There are various challenges faced by Apple in China related to the sustainability and supply chain (Strauss, 2019). These problems arecost of distribution, inappropriate staff behvaiour and higher possibility of product damage. These are main challenges that have direct and negative impact on Apple. Along with this, current research is important for different stakeholders i.e. organisation, researcher and students. For students, this dissertation or topic helps them by increasing their knowledge regarding the supply chain and sustainability. For researcher, current research is highly beneficial for them by improving their different types of research skills i.e. data collection, time management, presentation and decision making (Li and Xia, 2021). All these are main skills that facilitate investigator in improvement of its personal and professional growth. For organisation, current research is externally beneficial for them by providing accurate and relevant information regarding the 6
benefits of sustainability in iPhone supply chain. Therefore, all these are main stakeholders that are benefited with the help of current dissertation. Research Questions What is the sustainable global supplychain? What is theApple iPhone supply chain approaches and model? What are theupstream and downstream players in the Apple iPhone supply chain includingtheir geographic location? How many businesses have the supply chain in China? What is the macro-environment factors in China using PESTLE analysis, which is related to the sustainability of the Apple iPhone supply chain in China? 2. Literature review on the topic: “Sustainable supply chain” It forms out one of the most vital aspect of any research and investigation that comprises of systematic review and analysis of the pre-existing and secondary form of information. Literature review tend to be vital aspect of every research as it set out the base and entire framework for the study (Lim and Tan, et. al., 2021). The current literature review is based on the topic of sustainable Apple's the supply chain is from the angle of analyzing the macro environment in China that tend to focus on enhancing the sustainable supply chain. Use and analysis of the online article and other firm of literature present in form of book, journals and other records has been made for having an effective literature review based on the concept of sustainable supply chain. The concept of the Sustainability is mainly related with the making decisions by the firms and companies that they work and perform their activities in such manner that do not have negative consequences for either current or future generations. As per this broad definition, sustainability is something that aim at creating a positive impact on a wide range of ecological and human issues along with changing attitudes for the preservation of natural resources to a commitment to human and societal wellbeing (Yu and Chen, 2021). Further, the definition of the Sustainablesupplychainmanagementbasicallyinvolvestheimprovedintegrating environmentally and financially viable practices that organisation tend to have into the complete supply chain lifecycle, from product design and development, to material selection, (including raw material extraction or agricultural production), manufacturing, packaging, transportation. It has been analyzed that the transportation and packing of the product are the main reasons that 7
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creates maximum of the pollution thus, it is vital for organisation to think about more sustainable and pollution free ways of transportation and package of the product to ensure a more sustainable and positive supply chain. The below stated objectives are tending to provide a detail and more vital understanding regarding the sustainable global supply chain (Hong and et. al., 2021). Along with this, the undertaking of current study and literature also comprises of better analysis of the Apple iPhone supply chain approaches and model along with determining the upstream and downstream players in the Apple iPhone supply chain including their geographic location together with the review of many businesses that have the supply chain in China along with macro-environmentfactorsinChinausingPESTLEanalysis,whichisrelatedtothe sustainability of the Apple iPhone supply chain in China. Toconductaliteraturereviewwithpurposeofincreasingunderstandingregardingthe sustainable global supply chain With respect to the information provided byRana, R.L., Tricase, C. and De Cesare, L., 2021, a better understanding regarding the satiable global supply chains has been derived which consists of determination of the impact a company’s supply chain that it tends to make in promoting human rights, fair labour practices, environmental progress and anti-corruption policies. It has been analysed and seen that a growing and continuously increasing need for integratingsustainablechoicesandadoptingeco-friendlypractisesintosupply-chain management is seen that is increasing concern for sustainability and creating pressure on companies for transforming their approach and way of business operations. The concept of the sustainable supply chain is basically based on meeting of the set corporate values or business opportunitieswhilemeetingthetraditionalprioritiessuch asquality,efficiencyand cost regularly together with keeping in mind and compete for proper attention towards the concerns such as working conditions and environmental impact(Li, 2021). Thus, the main aim and focus of the A sustainable supply chain is to grab the value chain opportunities together with offering a significant level of the competitive advantages for early adopters and the process innovators who aim at meeting environmental practises and eco-friendly supply chain operation while meeting their long term goals and objectives. Further, it has been also observed and analysed that the to achieveasustainablesupplychainanorganisationneedstoeffectivelyaddressthe environmental, social, economic as well as all the legal concerns that might tend to come across its entire supply chain. Thus, as per taking a holistic approach the companies can understand the 8
concept of sustainable supply chain as a way through which they can make efforts to reduce the waste and environmental footprint and at the same time taking stopes for improving labour conditions and health and safety by the way of effectively stopping the worker exploitation. So, an understanding can be developing that a fully sustainable supply chain can be taken as the one that tend to ensure the socially responsible business practices that are not only good and beneficial for the physical planet and the people who living and working here but at the same time they tend to also support business growth and higher success in an improved manner(Mani and Gunasekaran, 2021). Further,withrespecttotheinformationprovidedbytheMarkNutburn,2019,an increasing understanding about the main benefits and advantages of having sustainable global businessenvironmentcouldalsobemadewhichconsistsofreductioninthenegative environmental impact along with supporting and leading out improved continuity and betterment in supply. A detailed discussion and analysis of the some of the key benefits of having sustainable supply chain for a firm and provided and listed as below: Reduced environmental impact- One of the key benefit of having sustainable supply chain comprises of the fact it helps in reducing and meeting the negative impact of supply chain practises and other business operations on the physical environment. Thus, ensures a more healthy and better world to live for staff, workers and overall society. It was assumed that reducing the environmental impact of business are costly for organisation but the concept of sustainable supply chain tend to reflect that reducing environmental impact can lead to big savings for firms through reducing various wastage and enhancing the overall efficiency of the vehicles and machinery used in supply chain(Guo and et. al., 2021). For instance, the famous John Mitchell Ltd has invested in the driver training for its haulage fleet and reaped savings that leads to a higher saving and profit of over £650,000.Along with this, the famous sport retailer Nikehasalsoadoptedsustainablesupplychainpracticesandhaschangedthewayit manufactures some trainers that resulted in form of reducing labour costs by up to 50% and reducing material usage by 20%, that has been resulted in form of 0.25% higher margins(Xu and Dai, 2021). Improve continuity of supply- The another major advantage of having sustainable form of supply chain comprises of the fact that it tend to have the over reliance in a single link in the supply chain market that have a known on effect on the business. It has been observed that 9
having a multiple suppliers for raw material helps to improve the continuity of the product and also prevent the costly downtime and reputation damage through creating and ensuring a more sustainable and error free delivery of raw material. Thus, having a sustainable global supply chainis vital for a form as it avoid the chances of the delays, shortage of resources and steep costs thus, enhance the profit level and also protect the reputational damage for a firm(Dhakar and et. al., 2021). Potential for new partnership- It has been analysed that in today’s business environment the customers, suppliers and all other associated parties and stakeholders of a firm are tend to become more environmental and social friendly who are in support of sustainable supply chain. Thus, having a sustainable supply chain helps to create an improved brand image and reputation in the market that act as an attractive prospect for the companies that are tend to look for partner. So, having and adopting the environmental credentials and eco-friendly supply chain practises will likely to help the firm to align with the other valuable brands that tend to open new potential partnership and other business opportunities in form of improved brand image(Arora and et. al., 2021). Support from government initiatives- Due the rising issues such as global warming, climate changes along with exploitation of workforce and staff has make government more concerned towards the sustainable practises. Thus, many governmental initiatives are tend to provide by the United Sates and many other nations of the world including, China, UK, etc. who are providing tax benefits and other investment incentives for the companies who are adopting sustainable supply chain practises and management. Along with this, in many parts of the world, sustainable practises are also taken as part of mandate law, thus, adoption and making use of sustainable supply chain is always beneficial and advantageous for a business organisation as it tend to support improved opportunities and governmental support for having smooth business operations(Han, Goetz and Schmidt, 2021). Apart from this, according to the view point ofZhang, H., 2021, it has been observed that the three key and most elements of supply chain sustainability tend to include the social responsibility of a firm, its environmental responsibility, along with the financial responsibility. An understanding has been developed that the social responsibility of a firm is basically focused on addressing the moral, ethical, and philanthropic expectations that society tend to have from an organization.Further,theenvironmentalresponsibilityisrelatedwiththemeetingthe 10
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environmental needs by the way of seizing the carbon foot print and reducing other negative impact on environment(Kudtarkar, 2020). The last financial reasonability of the sustainability in supply chain comprises of supply chain finance practices and the other techniques that helps to support trade transactions, in more efficient manner that aim at minimizes negative impacts and creates environmental, social, and economic benefits for all stakeholders involved in bringing products and services to markets. Further, it has been also analysed and observed that the Sustainable supply chain management is a vital process that tend to involves the integrating environmentally and financially viable practices into the complete supply chain lifecycle, from product design and development, to material selection, (including raw material extraction or agricultural production), manufacturing, packaging, transportation, warehousing, distribution, consumption,returnanddisposal.Thus,ithasbeenobservedthattheadoptionofthe environmentally sustainable supply chain management and practices helps to assist a company in reducing their total carbon footprint and also tend to optimize the end-to-end operations in order to achieve a greater cost savings and improved level of the profitability. The main prioritises of having a sustainable supply chain comprises of the having proper Environmental stewardship along with focusing on the Conservation of resources and Reduction of carbon footprint(Li and Xia, 2021). Further, Financial savings and viability along with meeting Social responsibility by the way of adopting good practises such as equality at workplace, positive working environment, healthy relationship, etc. also forms out a vital part of sustainable supply chain. Further, there are many reasons that tend to support the sustainable supply chain by a firm which comprises of the fact that having sustainable supply chain improves the financial results as it helps in improving overall brand image that drives increased sales and higher share valuation. Along with this, elimination of the waste and harmful activities is taken as the hallmark and most vital aspect of the sustainable supply chain that supports financial advantageous and other improved practises for a firm(Strauss, 2019). Further, with respect to the information provided by the Velislava Ivanova, 2014, it has been analysed that various effective ways are there that can be adopted and implicate by a business firm to support and have a more sustainable supply chain that consists of effectively mapping the supply chain activities along with communication expectations to ensure balance with supplier to enjoy sustainable efforts. Apart from this, it has been also seen that the baseline the suppliers performance along with setting compliance standards and collecting information from suppliers 11
forself-assuagementalsosupportseffectivecreatingandmanagementoftheeffective sustainable supply chain. Beside this, it has been also understood that the developing and providing proper training and effective capacity building programmes is also an effective way to bring positive changes in the attitudes towards having a more sustainable and eco-friendly way of supply chain. Implication of proper conferences and online training modules through capacity building campaigns together with showcasing the success stories of selected suppliers, the business organisation can recognize and make effective efforts to demonstrate the practical benefits of sustainability initiatives to others in the supply chain which motivates and directs operations towards sustainability(Wang and et. al., 2021). Apart from this, the other steps that can be taken and adopted by a firm comprises of effectively developing or deploying the improved and robust tracking tools within the firm which is including software solutions in order to effective monitor and analysis the supplier performance and their improvement towards concept of the sustainability over the time. Along with this, regularly performing a logistics assessment is also an effective way to develop suitable supply chain by determining where sustainabilityimprovementscanbemadealongwithhavinganintegratedsupplychain sustainability criterion into the procurement process to ensure and have more better management of supplychainsustainability.Besidethis,creatingapropershifttowardssupply chain sustainability by the way of leveraging buying power and influence helps to expand the sustainability goals of a firm beyond the direct operations across your supply chain by the way of effectively encourage and leading improved innovation is supply chain management to have better check on wastage and pollution level in supply chain (Lim and Tan, et. al., 2021). To recognise the upstream and downstream players in the Apple iPhone supply chain including their geographic location In accordance with the information provided bySong, G. and Song, S., 2021, it has been observed that the Apple is the world largest technology company that is engaged in the business of manufacturing and marketing the tablets, smartphones, wearables, computers and services across the world. Along with this, many supply chain experts have also determine Apple is the best supply chain at a global level and has achieved five out of five points that is setting an example for all the participants of supply chain community. Many vital steps are being taken by the Apple for reducing the inventory holdings that supports reduction in warehouse cost and makes its supply chain process more cost effective and efficient (Yu and Chen, 2021). Further, a 12
close look about the upstream and downstream players of the Apple IPhone supply chain has also been provided that comprises if the US based Vishay technology and Total SA who are taken as the brain of the entire system of Apple company who are responsible for having effective research and development and improving better ways that supports sustainable form of supply chain. Further, the upstream and the downstream players of the Apple IPhone supply chain also comprises of effective development and supply of its passive components i.e. the resistors and the capacitors that are carried out and supplied by the Samsung which is Japanese company along with Taiyo Yuden and 5 other companies (Hong and et. al., 2021). Thus, an analysis can be made that Apple having a multiple form and layer of supply chain that enhance and improves its sustainability level by the way of not leading it depend on some particular and single supplier which enhance and secure the flow of its operations. Along with this, the main electronic component of the Apple are supplied by the Sony, Sumitomo, Omron, Mitsumi electric, Nidec, Sumida and NEC Tokin. Along with this, the main PCN manufacture of Apple supply chain comprises of PCB Guangdong and Ellington along with Japanese Ibiden, Pottinger, Hua Tong, Uni-tech, Unicorn and various other suppliers based in Untied States. Further, the connecters and patch cables for Apple iPhone are being supplied by the Foxconn, Hirose Electric, Dai Ichi and many other companies such as Molex and Tyco Electronics (Li, 2021). Beside this, the manufacturing of the Polarizing films are tend to taken place at the factorises of Japanese companies consists of Nitto Denko and Sumitomo Chemical. Finally, the assembling of all these parts of the Apple iPhone tend to take place un 16 factories that are located within the Taiwan comprises of Foxconn, Quanta 3 and Master 4. 14 factories of Apple iPhone are situated in China, 2 in USA and 1 more in South America. Along with this, it has been observed that full emphasis is made on maintaining the quality of products (Mani and Gunasekaran, 2021). Use of virtual technology is being made by the Apple in order to effectively maintain the quality of its work along with supporting and making use of all form of latest technological capabilities in order to maximize its quality and production volumes. Along with this, Apple pays attention to the primarily activities in order to have improved the quality of work, technological capabilities and maximum allowable production volumes thus, that’s why Apple is akin to recognizing high manufacturing quality which pays great attention to the control process and provide control over the quality and the raw materials. Apple not only work as one 13
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manufacturer but it tries to conduct its business in such a way that could switch to an alternative option with the best offer of quality and price ratio (Guo and et. al., 2021) . 3. Apple iPhone approach to supply chain The Apple iPhone approach towards the supply chain is considered as best approach in the world due to several reasons(Anastasiadis, Apostolidou, and Michailidis, 2020). The apple has synchronized its data between its 250 stores which helps the company to reduce their warehouse of California which proves to be a profitable decision of the company as it is cost effective as well as efficient for them. Apple iPhone has a large supply chain in which the design and develop their products in United States of America where as source their raw materials from USA, China, Asia and Europe. The manufacturing of the products of Apple Company are dependent on the factory in China whereas the finished products of the company are stored in warehouse at United States of America. After collection of finished products in warehouse at USA the distribution is made from USA to global world. Apple company has there distribution all over the world which increases their supply chain and shows the requirement of supply chain management in the company. The CEO of the Apple company has strategic decision making in which they decide to have a lean supply management in the company that has result is consolidation of suppliers and reduced the number of suppliers of the company which makes the supply chain of apple to be short and simple with less confusion. Apple has also provide a credit line to some of their different suppliers which motivated them to be loyal to the company. It is because it is something which has not been expected in the supply chain management. In the supply chain industry no business has provide a credit line to their suppliers yet, The company has also worked towards creation of simplified and realistic demands forecast for the company with the help of reduction in their SKUs which reach at 26000 now. In order reduce the delivery time and logistics cost for the company they force their suppliers to shift near the Apple' company. The Apple also has a policy to renew their inventory in every 10 days. The inventory turnover rate refers to the times in a certain period the stock of a company changes. In case of apple they have high stock turnover rate as compare to their competitors like HP, Samsung and Del. This helps Apple to make the supply chain of the company to be best as compare to their competitors. 14
4. How many businesses have supply chain in China? How many businesses have supply chain in China? China is considered as manufacturing destination of the world as many of the large organizationshaveagreatdependenceonthemarketsofChinafortheirsupplychain (Bhattacharyya, Maitra, and Deb, 2021). Chinese market is a manufacturing hub due to its labor market. There are so many industries which are dependent on the supply chain with china for their products and services. Almost all industries has its dependence on supply chain of china except some like tourism and hospitality industry. The most popular industry which has a great dependence on the supply management of China is the Telecommute industry. China has a great technical knowledge and have a cheap and skilled labor force to develop the products and services in the telecommunication industry. That is the reason that Apple has a great dependence on their suppliers of China. The suppliers of China provides low cost products and services required by the company which helps apple and other companies to provide cost-effective products to their customers. Apart from the telecommunication industry, fashion industry also has their dependence on the Chinese market like She-in Company has their supply chain in the china, apart from this the electronic industry has a great dependence on the Chinese suppliers as there are many materials used in electrical items which are supplied by china at cost effective prices. There are so many parts that are used in mobile phones and electronic items which has been manufactured in the manufacturing units of China only. Otherwise it is very difficult for the companies in Electronic industry to develop cost effective products for their customers. That is the reason that the Chinese products are cheap in nature as China is a country which spend a lot on research and development. Their research and development and cheap and skilled labor is the reason that they are able to become second largest economy of the world. That is the reason that china is a great and largest manufacturer the company like apple is also dependent on them. The companies like Samsung, HP and Dell are also depend on the supply from China which deals in various industries such as electronics and telecommunication industry(Chu, Park, and Kremer, 2020). These companies are similar to the Apple Company as they run their business in great competition. The biggest difference in the companies are reputation and their origin countries from which they are operating. Instead of having same source of supply the quality offered by all the companies differ from each other which creates a great difference between all the companies 15
that are Samsung, Apple, HP and Dell. As all these companies has a great dependence on the market of China then the external factors of china has a great impact on the business of all the companies. The first impact of macro environment in Chinese market is of the COVID 19. This pandemic has changed the complete scenario of supply chain in china. The Trade war between china and US has changes the fortune of China as many countries has move their supply chain out of china due to this reason. This has results in the shifting of production and distribution networks of many companies out of china. This has gave a great downfall to the economy of China. As a result of this the giant company of South Korea, Samsung has shut their smartphone shop in China. As per a report, the area in which Samsung plant is established approximately 60 percent of the stores are shunted down that are local business of that area and some ancillary units.Intheyear2020,ThefirmsofjapanhasmovethemselvesoutsideofChina, Approximately 1700 firms who are japan invested withdraw their business which has creates a great tension in the economy of china. The economic factors are also affected by these actions in the market. But the technological factors of china has a great positive impact on the country. In this time when every country is planning to introduce 5G, China has ready to launch their 5G network. This has increased the value of china in mind of many businesses. Although the companies has withdrawn their industries from china but still they are depended to china for the supply of their materials. The technical advancement and skilled labor of the country is the power of china which makes many organization in various industries to keep themselves connected with China for their supply chain management(Golgeci, Yildiz, and Andersson, 2020). 5. Current situation in China using PESTLE analysis that related to the sustainability in the Apple iPhone supply chain Current situation in China using PESTLE analysis that related to the sustainability in the Apple iPhone supply chain1400 In order to ensure sustainability in the supply chain of Apply I phones in China, the company is required to analyze the external environment of china. External environment has several factors which has their different impact in the different organization in case of Apple I phone in order to have a sustainable supply chain in China the PESTLE analyses will help the company. It will help Apple Company to identify the several factors and their impact on its 16
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supply chain. The several factors of external environment in China and its impact on the sustainability of Apple supply chain has been explained below: Political Factors China is considered as one of the large countries of the world and have a permanent membership with United Nations(Han, and Huo, 2020). The relations between china and United stated are challenging from a very long time and after spread of COVID 19 these relations get worse between both the countries. This can put a negativeimpact on the supply chain management of apple in China as Apple is an American Company. There are high possibility to have an armed conflict between both the countries which can stop the trade relations between them. China has stability in their political environment but there is low political freedom in the country which can be a major problem for Apple(Ishida, 2020). COVID 19 has a lot of impact on the political environment of China and size of government budget can also have its impact on supply chain of Apple. Low size of budget will increase the inflation in China which can increase the cost for the supply of the products of Apply Company. As the political system of china has low openness in their political system it increases the chances of corruption in the country which also put a bad impact on the sustainability of the supply chain of the company. Economic factors In terms of Nominal GDP, China is known for having second largest economy of the world and based on the purchasing power, china has largest economy. Apple is highly dependent for its manufacturing on Chinese markets and any changes in the economy has a great impact on the business of Apple Company. As labor cost in china is increasing at a rapid pace which has impact on the cost advantage Apple Company have on some of their products from Chinese markets. Increased labor cost in china has also its impact on the supply chain of the company as with increased labor cost the company will not likely to continue their production of products in the country. Similarly, government spending and inflation rate in china has a great impact on the supply of products of Apple. Apple Company is require to make their strategies in accordance to these factors so that they can run their business for long run and in effective manner. Some of the economic factors which has a great impact on the sustainability of the supply chain of Apple company are the Minimum wages fixed by government for the labor force, Family incomes of the country with the saving rates, spending of government in the country or the size of budget 17
presented by the government as it defines the inflation rate in a country and many more(Jin, Zheng, and Huang, 2021). Social Factors Social factors refers to the societal trends and social influence on the sales of the company. As apple is greatly depended on the Chinese market for the manufacturing of their products and services and have a great impact with the relations of US and china. With the increased tension between US and China, the potential customers of the company of US and Europe can get offend due to the close association of Apple with china and this has an negative impact on the sales of the products of Apple and as a result will also have its impact on the supply chain of the company(Khan, Asim, and Manzoor, 2020). The sales of apple is highly depended on the emotional attachment of people with Apple products and lack of this strong emotional attachment will also have a negative impact. Apart from this the level of education in the society is also a strong factor which can affect the labor of the company in china as educated labor doesn't like to work in manufacturing units and can create shortage of labor for the company. These societal trend can also put a positive impact on the company as with education the Apple can be able to get more educated employees which can enhance the supply chain of the company. Technological Factors The market of China has great technological factors which has a positive impact on the supply chain of the products of Apple Company. When whole world is preparing to install 5G, Chinaisalreadyreadyfor5Grelatedinfrastructure.Thisshowsagreattechnological advancement of the Chinese markets(Li, Wu, and Xiao, 2020). This will helps the supply chain of the Apple Company to get effective sustainability. But still the trade war with United States has a negative impact on the supply chain of Apple as Biden provides for a statement to bypass china chains as they are involved in Cyber security breaches and many more. With the high technical advancement the economy of the country china is greatly depend on the technology and so does the apple company. Any failure of technical failure in China has a high impact on the business and supply chain of products of Apple Company. As supply chain requires so many people to be involved in the process with advancement of technology. It is require for the Apple Company to empower their suppliers with advanced technology so that they can have an effective record of the supply to reduce errors and frauds in the supply. These empowerment of 18
supply chain partners of the Apple company will helps them to provide sustainable supply chain to the company. Environmental Factors Environmental factors includesall those factors which helps an organization to do something for the society or environment to provide benefit to the environment in which organizationisoperating.AppleCompanymanufacturinghasincreasedsideeffectson environment and pollution in china which is a growing concern for the company to have sustainable supply chain. This can impact on the increased regulation on Apple which will later increase their manufacturing cost in the markets of China(Peng, Jia, F and Doherty, 2021). One of the benefit for effective as well as sustainable supply chain in china to Apple is the effort of Chinese government towards reduction of greenhouse gases and a limit set on fossil fuels. It will reduce the electricity charges which will reduce the manufacturing cost of the company and will increase their profits. The change in climate due to global warming in china has a bad impact on the sustainable supply chain of Apple as this has its disruption in transoceanic shipping of the company. Legal Factors There are numerous laws which are applicable in China to regulate the employment and business activities in the market such as employees’ remunerations and benefits, labor disputes, labor standards and many more. Being a part of Chinese economy, The Apple company is require to follow all the legislation which are applicable on them for the smooth running of their business. To have sustainable supply chain in China the Apple Company is require to follow health and safety laws and consumer safety laws in their organization. Apart from it, the Apple Company is also require to have a proper respect for the Chinese laws like the business laws and common laws in the country so that they can save the time and money of the company which can be wasted in the judicial trials(Zarei, Rasti-Barzoki, and Moon, 2020). China has independent judicial system which requires a lot of time to complete a trial in court. The follow of environmental laws, and human rights will help the company to have a sustainable supply chain so that they can run their business smoothly. 19
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6. Research Methodology It tends to form out a vital part of every project and investigation that provides a systematic analysis of the methods and approaches that has been applied by the researcher and investigator to undertake an investigation in most efficient manner(Xu and Dai, 2021). The current dissertation is based in analyzing the suitable supply chain for which a project is undertaken on Apple organisation for examination of the sustainability of the Apple iPhone supply chain in China. The suitable research method and approaches that has been applied for current study to effectively meet the its objectives and aim are provided as below: Research philosophy- This section of the RM tends to provides information about that plan that is applied for gaining effective knowledge about the selected topic. There are two common form and types of the philosophies of research that tend to include positivistic and interpretivisim philosophy. With respect to current study, that is tend to base on the sustainability of Supply chain, use of theoretical and in-depth analysis is seemed more suitable. Therefore, use of interpretivisim philosophy of research has been made within current study which supports better analysisofthehumanbehaviorandattitudeinordertomoreeffectivelyExaminethe sustainability of the Apple iPhone supply chain in China(Dhakar and et. al., 2021). Research approach- This is the section of research methodology which is associated with the better analysis and implication of the data along with its vital interaction and underdoing. Research approaches are further divided and bifurcated into two main types comprises of deductive and inductive research approach. In accordance with the nature of the current topic based in examination of sustainability, use of inductive approach is more suitable as it ensures better scanning of the theoretical facts and also in line with the interpretivisim form of research philosophy(Arora and et. al., 2021). Research strategy- It comprises of entire process of gathering information along with supporting the its effective analysis and interpretation for generation of idea and vital and conclusion. Action research, experiments, observation, incentives, systematic literature review, survey, etc. are some of the mostly used research strategy. From these types of the research strategy, use of systematic literature review has been made within current study as it supports better analysis and review of secondary form of information to effectively analysis and met the set objective in most cost and time efficient manner(Han, Goetz and Schmidt, 2021). 20
Research method- Entire base and framework of the study are lead out and reflected by the choice of research method which is mainly of two type i.e. quantitative and qualitative research method. With regard to current study, making use of qualitative nature of research method is more suitable and appropriate as it supports collections and analysis of the in-depth and theoretical form of information to have effective examination of the sustainability of the Apple iPhone supply chain in China(Kudtarkar, 2020). Collection of data-Basically there are two form of sources from where data is being generated by the researcher which comprises of primary and secondary sources of data. It has been seen that the collection of data from primary sources is more complex and takes more time, thus, it is not being used for current study. Along with this, due to the outbreak of covid-19, physical contact is not reliable and allowed thus, use of only secondary sources of information is being made for current study. The use of secondary source of information is vital as it facilitates more time and cost efficient way for effectively analyzing the preexisting information that supports better idea creation of framework for effectively meeting the set objectives(Li and Xia, 2021). Implication of the systematic literature review has been made within current study for Examination of the sustainability of the Apple iPhone supply chain in China that supported better discussion and analysis of available books, articles, records and journals that tend to relate with the current study. Further, in order to effectively made the set research objectives which consists of literature review with purpose of increasing understanding regarding the sustainable global supply chain along with identifying the Apple iPhone supply chain approaches and model use of qualitative approach is taken to have detailed information. Along with, in order to effectively recognize the upstream and downstream players in the Apple iPhone supply chain including their geographic location are also made to meet the set objective along with an identification of the how many businesses, have the supply chain in China. Further, in order to have effective Examination of the sustainability of the Apple iPhone supply chain in China, efforts are made to identify and analysis the macro-environment factors in China by making use of the PESTLE analysis, which is related to the sustainability of the Apple iPhone supply chain in China. 21
7. Secondary Data Analysis What is the sustainable global supply chain? Sustainable global supply chain refers to organization distribution system which perform a sustainable role into the society. This factors comes from looking at market resources, effective distributionchannelcompletelifecyclewhichstartsperformproductdesign,resource identification, transportation, packaging, logistics and distribution (Zamani, Sandin, and Peters, 2017). A sustainable way is that in which companies perform all these activities by maintaining environmentsafety, wildlife protection and serve all the political interference to expand their reach at different parts of the world. These supply chain function enables appropriate look out way to utilize resources to save them for future generation and be cost effective to serve society money worth satisfaction of the product and service. Global supplychain involves distribution and supply network across the globe. Therefore, the strategies and process forsupplying products may get indifferent across different boarders. What is the Apple iPhone supply chain approaches and model? Apple is the leading organization pertaining huge success into every part of the world with its most superior quality I phones, I pods and laptops. The company has 785 supplier but they has 349 suppliers which are based in China(Nesadurai,2018). Rest are belong to different countries where apple is serving their products and services. It has analyzed that, apple is one the best supply chain organization that holds a sustainable as well as profitability practices while supplyingtheirproducts.Thecompanyhasundertakeautomotivesoftware,extraordinary inventory controlare playvital role in keeping the company as the global ranker in supply chain.It believes in simplicity and beinginnovative in the most unique way which deliver a status symbol into market(Deymi-Dashtebayaz,and Norani, 021). The company use approach of supply chain start with product development with proper research and development of the market. Concept testing is the another approach as Apple do not believes in launching product as soon as it get developed but goes through market testing to analyses mistakes and modification required. 22
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What are the upstream and downstream players in the Apple iPhone supply chain including their geographic location? It is not easy to beat apple in terms of quality and maintaining standards of products and service in all geographic locations. There are many players who have exploitedmarket in electronic industry but does not take growth more extensively as apple. Companies like Facebook, Amazon are upstream players in maintaining sustainable supply chain into market as thesecompaniesacquiretheirman,made,materialfromChinesemarketintermsof technological advancement and IT experts(Centobelli,Cerchione, and Esposito, 2017).These company adopt digital channels of distribution which also consist market research and analyzing the concept by enabling new features in the application. Therefore, a ll the others companies such as Xiomi, Nokia are downstream playersof Apple as they do not hold competitionwith the organization due to having broad innovation and technology. How many businesses have the supply chain in China? There are several business and large organization who supply and distribute from China market. As the market is known for cheaper source for technology based resources which found to be cost effective for electronic based companies.It has analyzed that china is the low cost manufacturing market for the suppliers who wants to overcome cost taking products and enable high profitability. Therefore, many markets whether in Telecom, electronics, digital and E- commerce business. All these are found to be achieving highest growth by manufacturing in China which make the country most reasonable and increase its high capabilities, economic growth and currency power. What is the macro environment factors in China using PESTLE analysis, which is related to the sustainability of the Apple iPhone supply chain in China? Marco environment consist global factors that creates impact on organization profitability and performance. It include broadmarket concentration through which Apple maintain its innovation and need for improvement(Kumar, Hallqvist,and Ekwall, 2017). By analyzing Pestle analysis,technological advancement is a great change into China as the country known for keeping development so often. other factors like political and social also impact on apple I phone but the company deals with them by fulfilling social requirement and performing market roles within political stability.Environmental and economical sustainability is also serious concern 23
which has analyses as apple manufacture their products with0% harsh materials and 100% recycled aluminum due to which the company has achieve 35% reduction in carbon emission. 8. Findings, discussion and recommendations Apple Inc. is an American global innovation organization that has practical experience in customer gadgets, PC programming, and online administrations. Apple is the world's biggest innovation organization by income (adding up to $274.5 billion out of 2020) and, since January 2021, the world's most significant organization. Starting at 2021, Apple is the world's fourth- biggest PC merchant by unit deals, and fourth-biggest cell phone producer. It is one of the Big Five Americandatainnovationorganizations,alongsideAmazon, Google, Microsoft,and Facebook One key part of Apple's store network is its utilization of numerous providers for a similar segment. Audits on this part of Apple's inventory network procedure to analyze the job that sheets and chiefs can play in upgrading store network the board and hierarchical execution. Apple has gotten different honors for its store network system. As of late, for instance, Gartner, a US-based examination and warning organization, granted Apple its debut "Experts" grant after beforehand positioning Apple No. 1 on its "Main 25 Supply Chains" list for as far back as 5 years. One key part of Apple's inventory network is its utilization of numerous providers for a similar segment. The Governance Leadership Centre surveys this part of Apple's inventory network procedure to inspect the job that sheets and chiefs can play in improving store network the executives and authoritative execution. Apple hosts a broad organization of third gathering providers in its production network. As indicated by ongoing examination, Apple has 785 providers in 31 nations around the world, 349 of which are situated in China. As per Apple's "2015 Supplier List", 97% of its store network (counting obtainment, production and get together) is represented by its main 200 providers. This would infer that 585 of Apple's providers represent the excess 3% of its store network, furnishing it with a huge level of inactive limit. Apple has various elite long haul concurrences with its key providers and utilizations prepayments to arrange positive estimating terms, secure vital crude materials and assurance high volumes of creation. Apple has likewise expanded its store network to incorporate new assembling accomplices in China and Taiwan. It has additionally gotten numerous providers for 24
key segments identifying with new items, (for example, the Apple Watch)(SunnyUndralla,and Pillai, 2020). Notwithstanding enhancement, Apple puts resources into tweaked producing hardware and robotized gathering and processing innovation. It has likewise as of late reported ecological projects with its Chinese assembling accomplices to counterbalance fossil fuel byproducts and use all the more perfect energy. As per a new report from Deloitte, associations with adequately represented outsider connections can outflank their friends with an extra 4-5% Return on Equity (ROE). There are various manners by which sheets can gain from Apple's inventory network model to upgrade their production network the board and authoritative execution: Think about the advantages of different providers for a similar segment: Boards ought to urge the executives to consider the utilization of elective providers and regardless of whether this may lessen single provider chances or give a road to further developing execution. For instance, a new review of 150 production network chiefs by Haslam College of Business' Global Supply Chain Institute tracked down that in excess of 33% of people overviewed (38%) expressed that their associations'stockpilechainssourced from a solitary provider and just half (53%) considered their associations had a 'back-up' plan because of catastrophic events or significant hardware disappointment. Quantify and assess execution: Boards ought to intently screen productionnetworkexecutionbydissectingmonetarymeasurements,forexample,stock turnover and the money transformation cycle (CCC). These measurements can be utilized by sheets to assess whether the executives is utilizing the organization's monetary assets effectively. Empower a consistence culture and the utilization of ordinary reviews: Boards ought to energize consistence societies inside their associations and the utilization of standard reviews. For instance, Apple has a severe set of accepted rules and principles that every one of its auxiliaries, subsidiaries and subcontractors are needed to submit to. It additionally delivers a yearly "Provider Responsibility Progress Report", which traces the quantity of reviews it has embraced and gives subtleties on its work and basic freedoms drives, like reimbursements to laborers for neglected extra time or because of inordinate enlistment expenses charged by representatives. The report has identified various ways through which Apple iPhone enlarge their growth and success in to market. Supply chain is one of the major factor under the research which has been focused thoroughly bi and define all the areas, impact and its significance for apple. Therefore, the research has find out supply chain must be maintained in order to assist product and services 25
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in a better way and reach to their potential customers within a nominal cost value that would give customer as well as organisation satisfaction in terms of quality and profit. In order to ascertain market value and eliminate technological China is said to be one of the major leading market into the world economy who has contributed globally with 75% of economic value. Therefore, it has found out Apple supply chain is Highly Effective as their innovative and simplicity result in in being a market leader to establish a status symbol that no other organisation could perform into the current market. In the current time, Apple is giving tough competition to all the electronic organizations as there is no superior quality or quantity better than iPhone. So that supply chain played a vital role in bearing competencies and distributing product and services at a wide reach. A good supply chain system is all an organisation need to develop and elaborate their market expansion which is necessary to increase sales and enable high profitability(Özbük and Coşkun, 2020).China is found to be the most cost effective market to enable business by seeing great market opportunities for long term. It is known for the most technological advance market which emphasis on highly innovative techniques as well as unique product design which give least cost and price advantage. Therefore Apple iPhone has globally served then main potential into the market by being a Chinese developer and Sourcing direct and indirect supply chain for creating Global image. There are some recommendations which needs to bi a certain in order to analyze and acquire best supply chain approaches and practices for maintaining well brand position into future leading market. AppleneedstocoverthestrategicdecisionsforprovidingiPhoneintwomore geographical locations so that no other organisation could take first mover advantage and opportunity of New Market. The company needs to acquire various distribution channels at one time so that product launch will not get delayed and customers could get satisfy beyond expectations. By analyzing future uncertainty and risk, Apple needs to cover up the cost of supply and transportation in the present time so that they would not lose pricing policies which could goes upwards by analyzing economic instability and inflation. To be very careful about political and social factors, iPhone needs to keep bringing regular innovation and changes to remain active and in the eyes of customers. 26
Digitalization is much more necessary in future context so that the organisation would not lose their existence from social media and perform best leading role in every platform by showcasing magnification features of iPhone and its durability. Apple needs to identify More market requirement and what could be best for their products need to be supply to maintain existing brand position and does not let any other form to take advantage of leniency(Mavi, Saen, and Goh, 2019). ChinaisthemostleadingmarketsoApplemustmaintainstakeholderrelations community engagement sustainability and Society welfare to bring a positive impact in China for better growing into future. There is need to put more focus on sustainability as apple already did in the past Years by reducing carbon emissions and using aluminum products which are safe and protected for environment and people. The company manufacture products with superior body and material that must be renovate and modify as per market needs. It has analyzed from the above recommendation that the company required to develop appropriate Strategies and various offers through making collaboration to enable more prominent supply and deliveries in all over the world. There are some locations that require extra transportation expenses and cost to deliver Apple products so that the company needs to maintain relations and cover all the unnecessary cost which leads to lower down company's growth and profitability(Torky, nd Hassanein, 2020). As apple is one of an inspiration for other business to undertake high market share and capable of performing business practices across the globe. It is essential to be stick on their goals and perform vital functions for acquiring not only china but either market such as us , India and other countries. 9. Conclusion The research has concluded main aspects of the topic which cover the concept of supply chain with the viewpoint of sustainable production and distribution into global context. It has analysedthat,sustainabilityisanecessarycomponentfortheorganisationtomaintain environmental, economical and social well being whichis a vital role play to serve a reputed brand name into market.The research has covered diversified areas of supply management which includes product design market testing, area of distribution as per geographic regions and technological advancement in China. The country is well-established and undertaking peak advancement in technology due to which many market players wants to work in China to enjoy 27
heavyprofitmargins,sufficientinventoracquisitionanutilisationofmarketresources. Therefore, Apple is one of the leading market player of China that provides various opportunity to be innovative for customers and country as well.Less cost consumption is the great factor which require sustainable operation to secure market activities. The research has evaluated concept of global sustainable practices in terms of identifying macro environment factor such as political interferences, environmental issues, social well being, economic stability and legal proceedings. All these factors performed positively by Apple I phone which is the reason behind the success of companyat global level. Also, Apple believes in simplicity and software integration which is necessary factor to involve acquisitions and being updated about technology as well as customers demand.The research being together many related facts about Apple supply chain which shows, it has great procedure of research and development activities maintain supply and distribution with effective channels. Digitalisation is the main move of apple towards success In distributing products. At first, company was not prepared for market growth due to macro and micro-environment crises revealed upon the industry. In the year of 2015, the company took rapid rise by identifying the main areas such as leadership, innovations and continuous improvement could achieve their aims and objectives. Also, China comes under global supplier for many business industries like fashion, IT, auto mobile, electronics and many others. It is how, the China is being the reason on of market competition and business trends. In order top accomplish targets, many companies acquire Chinese market for identifying stock and product relevancy. REFERENCES Books and Journals Anastasiadis, F., Apostolidou, I. and Michailidis, A., 2020. Mapping sustainable tomato supply chain in Greece: A framework for research.Foods,9(5), p.539. Arora, A. and et. al., 2021. Global Value Chains’ Disaggregation through Supply Chain Collaboration,MarketTurbulence,andPerformanceOutcomes.Sustainability.13(8). p.4151. Bhattacharyya, S.S., Maitra, D. and Deb, S., 2021. Study of adoption and absorption of emerging technologiesforsmartsupplychainmanagement:Adynamiccapabilities perspective.International Journal of Applied Logistics (IJAL),11(2), pp.14-54. 28
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