Report on Apple's Supply Chain: Issues, SCM, and Recommendations

This report analyzes the key issues in Apple's supply chain management, focusing on challenges such as overreliance on specific suppliers like Foxconn, ethical concerns related to working conditions in assembly lines, and the need for sustainable practices. It identifies problems in areas like logistics, inventory management, and production planning. The report recommends strategies such as implementing RFID technology for asset tracking, optimizing inventory across the supply chain, improving sales forecasting for better production management, and adopting JIT (Just-In-Time) or lean production methods to minimize waste and improve efficiency. Ultimately, the goal is to enhance Apple's supply chain competency, address ethical concerns, and ensure sustainable business practices while maintaining its competitive advantage. Desklib offers a variety of resources, including solved assignments and past papers, to support students in understanding complex topics like supply chain management.

Running Head: SUPPLY CHAIN MANAGEMENT 0
Supply Chain Management

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Table of Contents
Introduction................................................................................................................................2
Analysis of issues in Apple supply chain...................................................................................3
Recommendation........................................................................................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Introduction
Expansion of a business comes with various challenges in extent to management of supply
chain. Management of supply chain can be understood as systematic and strategic
coordination in respect with traditional functions of business in chain of supply. The main
objective of supply chain management is embraced towards improvement of performance
with long-term perspective in advent with change in technology. An organisation can also
gain competitive advantage with the successful implementation of supply chain abilities
linked with common mechanism and various aspects in supply chain management
(Giannakis, and Papadopoulos, 2016).
For explicit understanding, Apple is selected as the company boast of having the world best
supply chain management system in the world. Steve Jobs and Wozniak found Apple in
1976. Much of what the critics and social media claim about their system; the past has shown
a lot of increased sales and efficiency in the system. One of the key supplier of Apple is
Foxconn, assembles most of Apple iPhones.
This report outline some key issues in Apple supply chain that have a significant impact on
the company business performance. In addition, it will also be identified that how supplier
development and SCM help in improvement of business performance and contribute them in
gaining of competitive advantage (Lambert, and Enz, 2017).
Analysis of issues in Apple supply chain
Based on its large markets, Apple is one of the company with the largest supply chains. It has
also extended to Africa. 121 stated that such large supply chains often includes numerous
risks that can impact productivity and profitability. Ideally, the greater the supply chain, the
more are the risks. Some of the main supply chain issues are discussed here. The primary
concern associated with the supply chain of Apple is overreliance and challenging emphasis

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on Falcon which has designated the role of collecting and sorting their new models. Apple
had mostly relied on mega manufacturers to assemble the new models. Moreover, sudden
changes in the company`s operations had changed which further forced the company to divert
the work in such a manner which would make equitable for company and its suppliers. Apart
from this change, Apple has another supply chain which is used for most products and these
products includes iPods, iPhones and computers. The company shares the first supply chain
with several suppliers in order to fulfil the global demand of the product. The assembling
department of Apple has been facing several issues due to poor quality work of their
employees. This has been noticed in their one of the assembly stores in china, the workers
criticised of long hours. Moreover, absence of proper and safe gear for the dealings due to a
destructive chemical situation which can be dangerous enough if it is not handled properly.
This issue has hampered and hindered the production due to destruction of supply chain.
Earlier, the Apple digital store enjoys honour of operating the iTunes store and with the help
of effective supply chain, Apple can move the music, video, games, television programs, and
publication. Apple prefers to operate through a separate system in order to observe the
control system and take steps to consider the emerging issue which has to be fixed in
particular time without affecting the other goods and services. It will become easier to fulfil
the increasing demands of the customers by focusing on the single product line.
The organisation secondary concern in relation to supply chain includes issues related
development and design. These issues had led in the branch of US where the plans are being
set for design and development. The other phase is the sourcing of the facilities which are
found in America, Europe, China and Asia. Moreover, the manufacturing phase of the
products which is located in China. After the manufacturing process, these sub-products have
been transported to the main branch and then it is distributed to the global market.

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While viewing at the supply chain of Apple, it is important to define the logistics system of
Apple that consists of manufacturers, suppliers, distribution, and the retail stores that has raw
materials and the finished goods. Apple assembles the sub-parts from different assembly
plants which is based on china, one is located in Texas, California, and Brazil. Apart from
this, Ireland has an assembly line for Mac. In such a big and complex supply chain that is
incomplete without the presence of any of the mediator. The company`s supply chain faces
many challenges and many of the times, these intermediaries have become successful in
executing and overcoming the issues. Firstly, it is important to manage the risks associated
with the supply chain strategy. Apple is among those largest companies who manages largest
supply chain. As these threats and challenges comes from the .changes in geographic terrains,
natural disasters, ethical misconducts, and diversity in revenue base. Mitigation strategies
include supply chain assessments, supply chain segmentation, and the creation of risk
indicators. Evaluation includes assessment of the supply chains. Such evaluation will target to
identify the lapse, fortification measures, and other possible improvements that can measure
the performance of the supply chain in order to ensure that it does not face any significant
risks. For example- iPods are supplied in the consignment. Different measures have been
used such as overseas supply of different products. Further, supply chain for Apple does not
deal with a single product but it relies on list of indicators which is to be affected by risk. The
company can also think of reducing the profitability and it ensures that company assess its
supply chain and perform well as they are not facing any enigmas. On the other side, the
company uses client complaints as its pointers to performance of supply chain. The above
were just the steps to reduce the risks but it is important to discuss some strategies that help
the company to reduce to risk and develop such strategies to handle the supply chain`s
scandal (Biazzin, Solano-Charris, and Quintero, 2017).

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1. Use of RFID (radio-frequency identification) technology- This technology can be
used to identify the electronic magnetic fields and track the tags that are attached to
the objects. This technology is used to work on identification of radio frequency based
on tracking. This technology embedded in the supply chain will help the system to
improve the asset management by tracking those assets especially when the goods are
in transit. This RFID asset tracking system will use the electronic system to transfer
the data from RFID to the reader. The main cost associated with the RFID is its chips
(Kumar, Banerjee, Meena, and Ganguly, 2017). One best of reducing the cost can be
reusing the tags by locating them on the price tags which can be removed at the time
checkout. Apple often uses electronic product code (EPC) (Bizjournals.com. 2018).
The company can apply EPC to various relevant stores in all over the world and also
to its raw material producers. Each raw material produced in different can be allocated
with the same chip. The information can be easily found by scanning the code that
had been stored in RFID chip which is attached to the final product. Information
based stores of this RFID chips as it provides a URL so that retrieving the information
for the product (Zohal, and Soleimani, 2016).
2. Making inventory through the whole supply chain- Total inventory includes all the
items such as working progress, customer services, production progress, and the
supporting activities, that finally help the company to execute the production process.
In order to ensure the low cost controlling the inventory will be the reason of Low pile
of inventory and the objectives to minimise the lead time and attain profitability. The
company includes a complicated supply chain due to its large operations. On the other
hand, manufacturing can have low cost with the enhanced profitability (Amaeshi,
Osuji, and Nnodim, 2008). The company CEO says that Apple suffers from the quick
depreciation as technological products are tend to have technological advancement.

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To make the process efficient, concise and clear, the company has reduced its
suppliers from 100 to 24 so that they can achieve an objective of reducing warehouse
and making those suppliers fully competent. The company should clear its dead stock
by selling iPods with Zero stock or the minimum wastage. Majority of the stock was
retained in the retail stores. To fulfil the online orders, inventory is shipped from
China that does not possess much stock in Warehouse that can help them to gain the
competitive advantage (Yawar, and Seuring, 2017).
3. Managing the production across supply chain by forecasting the sales- severe
planning and monitoring is required to make sure that adequate production in the
supply chain without increasing the requirement. This process of producing,
managing the vendors, and the role of distribution requirement plan by proper
planning in regards to manage materials. Proper implementation of scheduled
mastering will help to enhance success and satisfaction for all the levels of supply
chain. The company manufactures globally with variant production strategy that come
from international market (Yawar, and Seuring, 2017).
4. JIT or Lean production- the main idea of JIT is to make sure that the company needs
it because it aims to minimise the use of resources by using them effectively. The
company aims to manage the effective lead time, wastage from the operational
processes, and reduce the costs. The company can use kanban system through which
small cards can be attached to the carts by mentioning the amount of manufacturing,
allowing the raw material to withdraw. This strategy can help the organisation to
reduce the material inventories, WIP, finished goods drastically and at the same time
without compromising the quality (Lemmens, Decouttere, Vandaele, and Bernuzzi,
2016).

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Recommendation
Apart from maintaining one of the largest company with the strong technology usage and
innovative culture, Apple has been encountering several challenges related to supply chain.
The company should include supply constraints while launching the new product each year
and there is a need for a new material that lead to cloud slow and delay in manufacturing.
Moreover, the company has faced sustainability issues in 2012 due to unsafe work
environment in China`s unit (Tekin, Ertürk, and Tozan, 2015) . This has led to severe adverse
impact on brand but instantly the company has undertaken strict actions to implement the
green supply chain with stricter governance to ensure that the company has a sustainable
supply chain system. The main goal of the company is to get extreme potential advantage
from the inclined operations of Apple that needs to keep up its adaptability and nimbleness in
the configuration and finally assembling the capacities by connecting to creative exemplified
soul that stands for “think different”. This does not indicate that Apple does not utilize the
idea of inclination as it is through cautiousness and moderate use of its rules so that the
organization can recollect its quality to meet any sort of financial and political disruptions,
and to meet the emerging rivalry in the global world (Mani, Gunasekaran, Papadopoulos,
Hazen, and Dubey, 2016).
Conclusion
From the above analytical discussion, it can be concluded that in order to increase the
competency of the supply chain, Apple will have to speed up its distribution manufacturing
because many cases affect the profitability due to lag in time. China had issues with the
miserable working condition of the employees in the assembly lines which took long working
hours to meet the target. Moreover, these supply chain issues needs correction to execute the
business for the technological giant ethical. Falcon should be well structured and reanalysed
so that they can achieve just by looking at the distribution strategy of the store, and

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revaluating the sale strategy and overall ordering, shipping and speed of sales. The essay has
also recommended some of the most effective processes to resolve the issues of Supply chain
such as JIT and RIFD and many more.

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References
Lambert, D.M. and Enz, M.G., 2017. Issues in supply chain management: Progress and
potential. Industrial Marketing Management, 62, pp.1-16.
Giannakis, M. and Papadopoulos, T., 2016. Supply chain sustainability: A risk management
approach. International Journal of Production Economics, 171, pp.455-470.
Lemmens, S., Decouttere, C., Vandaele, N. and Bernuzzi, M., 2016. A review of integrated
supply chain network design models: Key issues for vaccine supply chains. Chemical
Engineering Research and Design, 109, pp.366-384.
Yawar, S.A. and Seuring, S., 2017. Management of social issues in supply chains: a literature
review exploring social issues, actions and performance outcomes. Journal of Business
Ethics, 141(3), pp.621-643.
Mani, V., Gunasekaran, A., Papadopoulos, T., Hazen, B. and Dubey, R., 2016. Supply chain
social sustainability for developing nations: Evidence from India. Resources, Conservation
and Recycling, 111, pp.42-52.
Tekin, E.K., Ertürk, A. and Tozan, H., 2015. Corporate social responsibility in supply chains.
In Applications of Contemporary Management Approaches in Supply Chains. InTech.
Amaeshi, K.M., Osuji, O.K. and Nnodim, P., 2008. Corporate social responsibility in supply
chains of global brands: A boundaryless responsibility? Clarifications, exceptions and
implications. Journal of Business ethics, 81(1), pp.223-234.
Kumar, G., Banerjee, R.N., Meena, P.L. and Ganguly, K.K., 2017. Joint planning and
problem solving roles in supply chain collaboration. IIMB management review, 29(1), pp.45-
57.

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Zohal, M. and Soleimani, H., 2016. Developing an ant colony approach for green closed-loop
supply chain network design: a case study in gold industry. Journal of Cleaner
Production, 133, pp.314-337.
Biazzin, C., Solano-Charris, E.L. and Quintero, J.A.J., 2017. Supply chain and operations
strategies for problem-solving in Latin American countries: An introduction. Journal of
Operations and Supply Chain Management, 10(2), pp.01-05.
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2017. Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
Bizjournals.com. (2018). Supply chain. Available on:
https://www.bizjournals.com/sanjose/news/2017/10/23/apple-iPhone-x-supply-chain-issues-
aapl.html [Accessed on: 22/02/19]