Report: Apple Inc. Supply Chain Strategy and Process Analysis

This report provides a detailed analysis of Apple Inc.'s supply chain strategy and processes. It begins with an introduction to supply chain management and its importance, followed by an examination of Apple's specific strategies, including its push-based approach and its emphasis on flexibility. The report explores how Apple aligns its supply chain with its company structure, plans its supply chain operations, and maps its supply chain network. It also identifies the key actors contributing to Apple's success. Furthermore, the report compares Apple's flexible supply chain with Samsung's approach, highlighting the differences in their strategies and the implications for their respective businesses. The report concludes by summarizing the key findings and offering insights into Apple's supply chain management practices.

Supply Chain Strategy and Processes

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Supply Chain Strategies implied by Apple.................................................................................1
Aligning supply chain with structure of company structure.......................................................3
Supply chain planning at Apple Inc............................................................................................4
Supply chain map of Apple Inc...................................................................................................5
Models of Supply chain..............................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
This report is based on Apple Inc company which is American multinational technology
company, headquarter of the company is in Cupertino, California, Apple company designs and
develops and sell the computer software and hardware and provide the online services. in which
I will be finding out which supply chain they are using and I will be focus in more details about
their flexibility. Supply chain management is a process which denotes flow of goods and services
in an organisation. It comprises transformation of raw material to finished products which are
ready to sell in the market (Willis, Genchev and Chen, 2016). I will be comparing with their
rivals Samsung which is the South Korean multinational company, headquarter of the company
is in Suwon, South Korea. It is the world's manufacturer of consumer electronics. Flexibility
refers to organisation's ability to adapt different scenarios as per changing business environment
whereas flexibility in the supply chain is also an ability to adapt changes and flexibility between
all the partners in the chain such as, suppliers, carriers and third-Party company.
MAIN BODY
Supply chain Management
Supply chain management includes number of activities that required to planning and controlling
the flow of goods, from transformation of raw material to final goods which is ready to distribute
in the market to final customer. Flexibility in supply chain enhances ability of business process
by enabling opportunity to enhance quality, performance, cost and time of activities. General
components of flexible SCM comprise adaptability which denotes adjustment in design of SCM
for meeting structural shifts and modifying supply chain networks and technologies. In addition,
flexibility in SCM aim at aligning of activities with the motive of managing incentives with
partners which helps the organisation in improving performance. Also, flexibility in SCM assists
the company in responding to short terms challenges.
Supply chain strategy
Supply chain management build and implement the strategy that effectively manage all the
members of supply chain which is - suppliers, manufactures, distributors and customers, for the
objective of lower the cost of production and distribution that meet the customer's need (Supply
Chain Management (SCM), 2019).
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Supply Chain Strategies implied by Apple
Apple is the world largest smartphone company, which is American multinational technological
company that designs, develop and sells consumer electronics, computer software and online
services and also produced the hardware products to customers with the help of flexible and
unique supply chain and inventory management technique in the organisation. Apple's supply
chain management is the world's best supply chain. (Ciccullo and et.al, 2018).
Apple's supply chain is the combination of science and the subject, in the science it calculates the
flexibility, advantage and disadvantage and the quantity of the goods. Supply chain of the Apple
analyse the demand of the product in the market on the basis of this production is being start
according to demand. All the functions the company are linked with each other and efficient
production of the goods is based on the effective supply chain, for this company invest on the
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Illustration 1: Score of Apple in supply chain
(Source: Apple: A Global Leader in Supply Chain Management, 2015)

updated technology and linked all the functions to the supply chain for flexible operations in the
organisation (Fayezi, Zutshi and O'Loughlin, 2017).
Push supply chain strategy
Apple uses the push-based strategy to sustain the relationship with the customers and also
collaborate with the partners and all the members who play vital role in the supply chain of the
company. This give the flexibility to supply chain of the Apple Company that they can make
their own supply strategies from the raw materials to final goods and distribution of the products
in the market and because of the flexibility in supply chain can make changes in their supply
strategies. When the demand is high then due to supplies problem, relation between company
and customers loose. So, with this push-based strategy Apple company analyse the demand and
need of the customer and provide flexibility to the production to make changes and design the
product to meet the customer needs (Kamalahmadi and Mellat-Parast, 2016).
This strategy helps the Apple in smooth running of the supply chain strategy and management
and give flexibility to the manufacturing of the products and lower the cost which is the ultimate
aim of the company to provide the products at affordable price (Willis, Genchev and Chen,
2016).
As opposed to Apple, Samsung Build the relationship with their supplier partners rather than the
customers. It helps the Samsung to build mutual trust and create a transparent process in
operating with only suppliers. By this Samsung cannot build the relation with the customers and
not able to find out the customers' demand and quantity of the products in the market that can
help the Samsung in the smooth production operation. With this Samsung provide the flexibility
to suppliers that they supply the products to end customers by their own way and failed to
provide flexibility in the work place and also failed to meet the demand of the customers.
Aligning supply chain with structure of company structure
The Apple Company use the strategy of aligning the supply chain strategies in this, supply chain
strategy which is used by the company must be linked with the company structure. If the supply
strategies are not flexible and match with the company structure then the whole system of the
organisation will be disturbed and again have to make new strategies, because alignment supply
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chain enables the synchronisation of the flow which include physical and information flow and
align the internal and external stakeholders in an action to execute and deliver the value. Apple
has the flat structure and follow flexible supply chain in which company gives the flexibility and
the preference to all the employees in all the location therefore company aligns their strategy to
the company structure for the smooth running of the supply chain process and give the freedom
to change their flexible strategy of the company that helps the company in inflow and out flow of
the Apple products (Manders, Caniëls and Paul, 2016).
In contrast with the Apple, Samsung prepares different strategies for both, company structure
and for the supply chain. In this sometime supply strategy does not match with the company
structure (Srinivasan and Swink, 2018).
Planning of Supply chain in Apple Inc.
Apple purchases their raw materials from various suppliers and to save the time and money
Apple ships that components via air that give the flexibility of time and money, to its assembling
plants in China and from china it distributes their products direct to the customers who are keen
to buy Apple products. Apple use such a new technology to give the flexibility in the production
and packaging of the products and make them attractive. And for giving the flexibility in testing,
conduct the product testing and market research before pre-launch the product to resolve the
backlogs and for demand forecasting that give the flexibility in the production (Apple: A Global
Leader in Supply Chain Management, 2015).
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Supply chain map of Apple Inc.
There are various supply channels including retail stores and distributors. Apple purchase the
components from various sources manufacture them in their assembling plant in china then to
products is intermediate to central warehouse from china and then distribute their products to the
end users through online, retail stores. This online distribution provides the flexibility to
company that they can sell their phones direct to warehouse to the customers and customers can
send the products back to the nearest apple store when they found something wrong in the
product (Apple: A Global Leader in Supply Chain Management, 2015).
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Illustration 2: Supply chain planning at Apple Inc.
(Source: Apple: A Global Leader in Supply Chain Management, 2015)

Key actors that contributing to the success of Apple's Flexible supply chain-
 Flexibility in the supply chain management is to save the time and money that it ships the
materials via air.
 It has only one central warehouse instead of various number of warehouses which created
the problems and also time consuming, had to shipped products to number of location but
with the one warehouse give the flexibility in distribution and saving time and easy to
manage.
 It furthermore shrinks the number of important suppliers involved in manufacturing,
shipping and storing which consumed high cost and difficult to manage, this give the
flexibility to manage staff and transport by limiting the supply chain members.
 Create synchronisation between the customers, their own stores and central warehouse
for efficient operations and to make it cost effective. (Simchi‐Levi, Wang and Wei,
2018).
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Illustration 3: Supply chain map of Apple Inc.
(Source: Apple: A Global Leader in Supply Chain Management, 2015)

Comparison of Apple flexibility with Samsung
Flexibility (Apple) Flexibility (Samsung)
In industry which is focused to metrics of high
demand uncertainty and where market cost is the
first top priority. Apple, such industry's follow
supply chain model. This supply chain models are
oriented to responsiveness, there are three
models:
• The “agile” supply chain model- This
supply chain is usually applied by the companies
which manufacture the products on the basis of
unique specification demand of the customers and
their demand of the products is unpredictable.
This model only provides the flexibility in
specialised production and those industry which
is characterised by unpredictable demand
Managers only focus on the ability to designing
and manufacturing process (Esmaeilikia and et.al,
2016).
• The “custom-configured” model- This
model is suitable for the companies which
produce multiple products and where unlimited
configuration is required. It is high correlation
between asset cost and total cost. And where
goods configuration is accomplished at the time
of assembly process where differentiated goods
are assembled as per buyer's specifications. This
model helps in providing flexibility only in the
manufacturing of the different products and have
to make different strategies for different product.
In this type of company different parts of the
However, Samsung follows the custom-
configured supply chain model in which different
part of the products required unlimited
configuration on the basis of the specification of
the customers. It is helpful for the company as it
configures multiple products and its part, they can
identify the problem in each part of the product and
can resolve it easily. But it is very time-consuming
model which Samsung applies, with this model
Samsung will fail to meet the need of the
customers within short period. As the smartphones
are used by every individuals and demand of the
smartphones are very high, if Samsung will fail to
fulfil the demand of the customers it will affect the
Samsung turnover and can lose their customers and
also profit. It also creates the problem in supply
chain that it is time consuming so the product will
not reach to the warehouses then distributors on
time and therefore it can spoil the relationship with
suppliers and distributors as well (Rezaei Somarin
and et.al, 2018).
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Illustration 4: Samsung mobile business
(Source: Samsung's Mobile Business Is Half the Size of Apple's, 2019)
products are configured according to customer’s
specification.
• The “flexible” supply chain model- This
SCM model is suitable for the companies where
is always high demand of the products
(Srinivasan and Swink, 2018). This model
characterised the reconfigure of internal
manufacturing process to meet the need of the
customers or to solve the problem. This model
shows, ensure to provide the flexibility by having
the extra capability of serious resources, suitable
strength in development of the process which is
easily reconfigurable and provide the flexible
supply chain that helps to make changes in the
strategies of the company (Flexible Supply Chain,
2019).
CONCLUSI
ON
From the
above study it
can be
concluded
that every
business has
its own
supply chain
management
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system. Apple is the leading company in managing supply chain it is involved in the process of
supply chain planning in which all the activities that should be carried out in managing supply
chain, takes place such as checking inventory level present now, launching of new software,
introducing another network of supply chain etc. Also, from above study it can be understood
that an organisation can have its supply chain in different countries because it can have
warehousing unit in different countries, manufacturing unit in different country and distributing
unit in another country.
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REFERENCES
Books
Ciccullo, F. and et.al, 2018. Integrating the environmental and social sustainability pillars into
the lean and agile supply chain management paradigms: A literature review and future
research directions. Journal of Cleaner Production. 172. pp.2336-2350.
Esmaeilikia, M. and et.al, 2016. Tactical supply chain planning models with inherent flexibility:
definition and review. Annals of Operations Research. 244(2). pp.407-427.
Fayezi, S., Zutshi, A. and O'Loughlin, A., 2017. Understanding and development of supply chain
agility and flexibility: a structured literature review. International Journal of Management
Reviews. 19(4). pp.379-407.
Kamalahmadi, M. and Mellat-Parast, M., 2016. Developing a resilient supply chain through
supplier flexibility and reliability assessment. International Journal of Production
Research. 54(1). pp.302-321.
Journals
Manders, J. H., Caniëls, M. C. and Paul, W. T., 2016. Exploring supply chain flexibility in a
FMCG food supply chain. Journal of Purchasing and Supply Management. 22(3). pp.181-
195.
Qamar, A., Hall, M. A. and Collinson, S., 2018. Lean versus agile production: flexibility trade-
offs within the automotive supply chain. International Journal of Production Research.
56(11). pp.3974-3993.
Rezaei Somarin, A. and et.al, 2018. Flexibility in service parts supply chain: a study on
emergency resupply in aviation MRO. International Journal of Production
Research. 56(10). pp.3547-3562.
Simchi‐Levi, D., Wang, H. and Wei, Y., 2018. Increasing supply chain robustness through
process flexibility and inventory. Production and Operations Management. 27(8).
pp.1476-1491.
Srinivasan, R. and Swink, M., 2018. An investigation of visibility and flexibility as complements
to supply chain analytics: An organizational information processing theory
perspective. Production and Operations Management. 27(10). pp.1849-1867.
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