Analysis of Apple's Outsourcing Strategy: Supply Chain Management

This report delves into Apple's outsourcing strategy, examining the rationale behind manufacturing in China and its impact on the company's supply chain. The analysis highlights the cost-effectiveness of outsourcing, the role of global manufacturing, and the benefits of this approach. It covers the outsourcing of core software technologies and the use of IT service providers. The report also discusses the factors influencing Apple's decisions, such as cost savings, the availability of skilled labor, and the importance of a flexible and derisking strategy. The report also includes the supply chain and manufacturing process at Apple to increase their profitability in business.

Running head: GEOGRAPHY
Geography
Name of the student:
Name of the University:
Author’s note

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2GEOGRAPHY
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OUTSOURCING PROCESS OF APPLE
WHERE
All products designed in
California
Outsources manufacturing jobs
to countries like China, Taiwan,
Korea and Mongolia
The product cycle starts from
manufactures to suppliers to
consumers (1)
Supply Chain of Apple
iPhone, ipads and other Apple products
designed in California, made in China
WHAT
Outsourcing strategy: Outsource cost
intensive segment of the product to
countries with lower economy and save
cost on manufacturing
5 lakh people employed in
China by manufacturing
partners to build Apple
products
Apple does not
outsource
development of core
software technologies
Extensive outsourcing
across data ware
housing, business
intelligence, enterprise
application, application
development &
maintenance (3)
Multisourcing and derisking
strategy employed and IT
service provider mainly
dominated by India based IT
companies (3)
WHY
The main reason for manufacturing iphones
and ipad in China is for cost savings.
Manufacturing in US cost about $64
more than China, hence gross profit on
each iphone is increased
China is well-equipped to build complex
gadgets with high proportion of engineers
than China (2)
The outsourcing strategy of Apple
is flexible and derisking process is
mainly applied to prevent
overdependence on IT provider
The supply chain and
manufacturing
process at Apple is
mainly for growth
and increasing their
profitability in
business (3)

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Reference
1. Blodget, Henry. "This Article Explains Why Apple Makes Iphones In China And Why The US Is Screwed." Business Insider,
2017, http://www.businessinsider.com/you-simply-must-read-this-article-that-explains-why-apple-makes-iphones-in-china-
and-why-the-us-is-screwed-2012-1?IR=T.
2. Kabin, Benjamin. "Apple's Iphone: Designed In California But Manufactured Fast All Around The World
(Infographic)." Entrepreneur, 2017, https://www.entrepreneur.com/article/228315.
3. Stevenson-Chettiar, Gerald-. "Demystifying Apples IT Outsourcing Strategy." 2017,
https://www.linkedin.com/pulse/demystifying-apples-outsourcing-strategy-gerald-stevenson-chettiar.