Operations Management Challenges and Apple Inc. Strategies

This report provides an in-depth analysis of the operations management challenges faced by Apple Inc. The study begins by highlighting the impact of technological advancements, globalization, and changing customer expectations on Apple's operations. It then delves into specific areas such as supply chain design, examining how Apple manages its complex global network, including the role of simplicity in supply chain decision-making. The report further explores inventory management practices, focusing on strategies to minimize costs and maintain a fast inventory turnover, and quality management, emphasizing Apple's commitment to Total Quality Management and its impact on product quality and cost reduction. The report also discusses how Apple adapts to changing job designs and global manufacturing practices. Finally, it underscores the importance of anticipating demand, managing inventory, and adapting to market dynamics to maintain competitiveness. The report is a valuable resource for students seeking to understand real-world operations management.

Challenges to Business Success an Operations Management Focus

Running Head: Operations Management
Contents
Part 1.............................................................................................................................2
Part 2.............................................................................................................................6
Supply chain design.....................................................................................................6
Managing inventories...................................................................................................8
Quality Management....................................................................................................9
References....................................................................................................................11
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Running Head: Operations Management
Part 1
There are numerous challenges that the operations managers are facing due to the changes in
the business environment and technological advancements. This essay discusses these
challenges face by the operations managers with regard to the changes in the technologies,
due to globalization of the markets, the changes in the Expectations of the customers, the
changes being brought about in the job designs, difference in the quality management
practices and the changes in the Global manufacturing practices adopted by the organizations.
Apple Inc. is a multinational organization designing, developing and marketing electronic
products and has built its entire business on the principles of flexibility and innovation. The
operations managers at Apple Inc. face numerous challenges that have become significant to
their responsibilities and the decision making process carried out on day to day basis. Apple
Inc. develops electronic devices that thrive on technology. Changing Technologies form the
basis of the product designing and the operations decision making for the organization. The
changes in technology also impact the product portfolio of the company which in turn defines
the activities and tasks carried out by the operations managers. The continued globalization of
the market where the first and the second world countries are merging their markets has
become an important aspect of the operational decision making. Globalization has made the
supply chain more complex and there are diverse cultures, customer expectations, who rules
and regulations, time zones and laws that need to be considered by the organizations when
deciding on their operations (EDGAR Online, Inc., 2011).
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Running Head: Operations Management
The organizations are increasingly becoming consumer centric and the electronic market is
driven by innovation and improvisation of the existing products and technologies in line with
the consumer expectations and demands. Since Apple Inc. is catering to the audience from all
age groups, ethnicities and nationalities, they need to keep their expectations from the
organizations and their products at the center of their operations management. If the
organization wants to stay competitive in the market, they need to continue with the
introduction of innovative products that are able to gain consumer attention and are able to
make use of the modern concepts of operational management like advanced supply chain
management practices lean manufacturing process and the steps to maintain the quality of the
product. With the changes in the type of products and their production and manufacturing
process, the organization also faces a lot of changes in the job designs of its key people.
These differences also continue further for the rest of the employees where are the roles and
responsibilities to be fulfilled by them are changed with the changes in the working
environment. Apple Inc. and their operational managers need to keep up with these changes
and design the jobs with regard to them in order to stay competitive in the market.
Apple Inc. is known for the quality of products manufactured by them and the organization is
ranked the highest in terms of product quality and innovation. The products introduced by the
company are trusted by the huge customer base and your organization has adopted the
principle of Total Quality Management to minimize the possibilities of human errors
happening in the system. Total quality management not only ensure that the organization is
able to deliver good quality products but also reduces the chances of mistakes and errors by
reducing the waste and making the manufacturing process lean (Miller, 2017).
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Running Head: Operations Management
This philosophical approaches to operations management have led the organization to its
present position of a global leader which is internally focused and is constantly working
towards cost reduction while also minimizing the wasteful expenditure. The total quality
management approach by Apple Inc. places the quality of the products produced by the
company as the primary consideration and internal structure of the organization is aligned to
address the supply chain towards value creation at every point. The total quality management
approach has seen the improvement of the quality of products, reduces the cost of operations
for the organization and improve their service provisioning to the customer who may be
located at any part of the globe. This is the responsibility of the senior management taking
care of the operations of the organization. It is generally practiced by analyzing the current
processes of the company and training the employees by providing them the required
knowledge and guidance and empowering them in order to achieve better quality for the
products of the company and the reduction in their operational costs (Valentine & Goedhals-
Gerber, 2017).
Apple Inc. also believes in stimulating creativity by establishing long term partnerships with
their suppliers and providing the required learning for the individuals. Apple Inc. does not
make use of market research for product development and for designing and presenting new
gadgets. The organization mostly goes by their own instincts for operations management and
product development. The Global manufacturing practices of the company allow them to
adopt the operational management strategy that makes the entire operations Management
process more agile and helps in addressing the needs of the customers by not just practicing
product differentiation but also offering them at a premium price range (Beasley, 2014).
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Running Head: Operations Management
The Lean manufacturing philosophy followed by Apple helps in preserving the agility and
flexibility of the production and manufacturing process of the company and mitigate the
negative impact that the operational management decisions have on their working. The
manufacturing operations of Apple Inc. happened by outsourcing the production, inventory
management and supply for the organization so that they can enjoy the differences in the
economies and their infrastructure. Globalization is a strong influence on the operations of
Apple Inc. and the Global manufacturing practices adopted by them allow the organization to
gain a competitive advantage and also allows them to differentiate themselves among the
similar organizations offering same products all products with similar functionalities to the
customers (Apple Express, 2017).
In the near future the factors like changing technologies, globalization and the changes in the
Expectations of the customers are going to impact the operation of Apple Inc. The
organization needs to bring about the necessary changes in the management process so that
they can continue to maintain their position in the market and a strong hold on the consumer
base.
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Running Head: Operations Management
Part 2
Supply chain design
Apple Inc. is often known across the world for the excellent supply chain management
practices and expertise in operations management. The organization is not only a world
leader in innovation but is also known for the excellent product design and the branding and
marketing activities which allow them to sell their products through the online channels,
retail stores and through the direct sales. Over the years your organization has evolved from
its humble beginning and your organization was given the title of the most valuable brand in
the world. Much of the success of the organization can be contributed to the excellent supply
chain management practices adopted by their leaders. The supply chain of Apple is ever
evolving and they have extraordinary control over their inventory along with sophisticated
software that supports the supply chain decision making for the operational managers of the
company (Hettiarachchi, 2016).
The sustained leadership demonstrated by Apple Inc and their management has led to the
development of a new notion for supply chain. The organization is constantly keeping a
check on the supply chain which is ever evolving and the blaze new trails by creating
exceptional capabilities for anticipating the demand and fulfilling it with highly innovative
products. Although the organization does not divulge much about the supply chain
management practices, there is no doubt that this decision making is extremely complex and
essential for the success of the company. Some perspective received on the practices of the
organization for their suppliers and manufacturers along with the end users is very different
(Wilson, 2012).
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Running Head: Operations Management
Simplicity is the basic principle that your organization has adopted in more ways than one for
designing and implementing the supply chain decision and carrying out operational
management in the company. The supply chain planning for Apple Inc. begins with intense
research and development with regard to the present technology and devices present in the
market. After acquiring the data and information regarding the consumer demand and
developing new technologies, the organization games the licence for the intellectual property
for the innovation. The organizations now conduct market research and carries out product
testing for determining its features and benefits. The organization also assembles cost data
and identify any potential defect that may be present in the products. This is followed by the
pre-launch preparation by Apple Inc. where the production ramp issues are managed by the
operations managers and the software for the new devices is decided. The material purchase
commitments for the upcoming product are also maintained and managed by the operation
manager and the quantity of the product to be made available at the time of the launch are
decided by the company (Saha, et al., 2015).
At the time of the launch, Apple Inc. ensure that the backlogs are resolved by them and they
make a demand forecast for at least the next 100 days. Only when the organization realizes
the potential off the device to hold the attention of the people for an extended period of time
do they begin with the launch of the product. This is followed by a regular review of the
market conditions and the product performance. During this time the operational managers
review the level of the inventory and make any changes that are required in the demand
forecast. The managers and the decision makers also keep a close watch on the status of the
product life cycle for the new product and also update its status on the new product
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Running Head: Operations Management
development grid. The level of sales for the company is closely monitored by them along
with the management and analysis of the trends for monitoring the component costs.
Managing inventories
Inventory management is an essential part of the management of the organizational
operations. It provides organizations an edge over their competitors and also impact the free
cash flow for them. If the Inventory of the organization moves at a faster pace, they can bring
about more changes and can charge the people a lower price for the product which not only
increases the velocity of the inventory movement but also attracts more customers leading to
productivity and profitability of the company in the long run. Apple is known for the
engineering profession and perfection and efficient inventory management process by the
company also allows them to get the product designed by them to the customers at the lowest
possible cost for the company. The Inventory of the products related to technology lose their
value very soon and this is a fact that Apple realizes and acts on at all times. As soon as a
competitive announces a new product which is better in its features and specifications as
compared to the one offered by Apple, their inventory begins to lose its value. The
organization closely monitors the number of suppliers to ensure that there is enough
competition that they give the best business to the organization. Apple Inc. also managers the
warehouses while acting towards the reduction of the stocking costs borne by them
(Foundation, 2018).
The organization also indulges in fair amount of forecasting for balancing supply and demand
Logistics for them. The inventory turnover for Apple Inc. is 69.4 and the average days of
inventory maintained by them is about 5 days. This indicates that for every store run by the
organization the product remains inside the store for about 5 days before they are sold. The
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Running Head: Operations Management
supply chain and inventory management process for Apple Inc. is well appreciated and
imitated by numerous organizations worldwide. Reduce the inventory holding cost for them
and has increased the pace of product movement from the manufacturers to the suppliers and
ultimately to the customers.
Quality Management
Apple follows the philosophy of total quality management where in the organization focuses
on delivering products of excellent quality to their customers at all times. The functional as
well as the operational manager of the organization take care of all the activities and carry out
complex decision making to ensure that a high quality is maintained for all the products
manufactured by them. Apple Inc. sells its products worldwide and the different levels of
management of the organization RH assigned a duty to ensure total quality management and
minimization of the human errors for them (Kaur & Arora, 2015).
The leader and Apple are obsessed with quality and have a well-defined development process
which turns out products with the best quality always. It is a very forward looking
organization having a modern approach to all the strategic management processes including
quality management. The organization is operating in one of the most competitive industries
in the world and has still maintained from position among the different companies offering
similar products. Apple Inc. demands for excellence and has vertically integrated the entire
production process. They develop their own hardware as well as software which provides
them the necessary strategic advantage and also helps them in developing strong corporate
reputation. The quality policy of Apple Inc. comprises of the standards and procedures that
ensure that the products of only the highest quality are produced and delivered which make
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Running Head: Operations Management
them a service oriented organization. There are numerous standards and procedures that are
followed by the company for the development of the product. The certification used by Apple
Inc. to certify their product include the ISO 9001:2008 certification, ISO 14001:1996
certification as well as the ISO 14001:2005 certification. They also provide their products
with energy star rating and the CMM level for the products follows the procedure of CMM-5,
PCMM and the CMMI (Apple Express, 2017).
The standard help in ensuring that the customers are satisfied with the products that they get
and encourage innovation while also increasing the market share of the company. The
management principles followed by Apple include customer focus, leadership, improvement
of their people, process approach, system approach to management, continuous improvement,
factual approach to decision making and supplier relationships that are mutually beneficial
for all the parties involved. The organization also has an environmental policy that it abides
by and even the manufacturing site of the organization or ISO Certified. The structured
management system for environmental management by Apple Inc. make use of advanced
Technologies to determine the impact that the organizational operations have on the
environment. Addition to this, the energy star ratings by the company also help in reducing
the energy uses by them and building products that are more energy efficient and in line with
the standards internationally recognized by all organizations.
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Running Head: Operations Management
References
Apple Express, 2017, We don’t just talk about quality management, we actually deliver it,
http://www.appleexpress.com/about-us/quality-management/
Beasley, M 2014, The quality assurance manager responsible for iOS 8.0.1 also oversaw—
you guessed it—Apple Maps, https://9to5mac.com/2014/09/25/apple-maps-quality-
assurance-josh-williams/
EDGAR Online, Inc., 2011, Apple Computer, Inc.,
http://files.shareholder.com/downloads/AAPL/0x0xS891618-94-21/320193/
Foundation, I 2018, Apple’s Product Development Process – Inside the World’s Greatest
Design Organization, https://www.interaction-design.org/literature/article/apple-s-product-
development-process-inside-the-world-s-greatest-design-organization
Hettiarachchi, H 2016, Apple’s Supply Chain Strategy,
https://www.researchgate.net/publication/313240886_Apple's_Supply_Chain_Strategy
Kaur, S & Arora, S 2015, Case Study of Supply Chain Management: Two foremost Smart
phones. International Journal Of Business Management, 2(1), pp. 1-10,
http://www.ijbm.co.in/downloads/vol2-issue1/63.pdf
Miller, J 2017, A Few Words On Apple’s Quality Control, https://mac360.com/2017/04/a-
few-words-on-apples-quality-control/
Saha, P., Nath, A. & Salehi-Sangari, E 2015, Transforming Supply Chains in Digital Content
Delivery: A Case Study in Apple,
https://pdfs.semanticscholar.org/a8c2/003baa34ed207547f720c40a888f8cdfd495.pdf
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Valentine, A. & Goedhals-Gerber, L 2017, The temperature profile of an apple supply chain:
A case study of the Ceres district. Journal of Transport and Supply Chain Management, pp.
1-8,
https://scholar.sun.ac.za/bitstream/handle/10019.1/100651/dutoitvalentine_temperature_2017
.pdf?sequence=1&isAllowed=y
Wilson, J 2012, Apple –The Global Supply Chain,
http://www.jackmwilson.net/Entrepreneurship/Cases/Case-Apple-Supplychain.pdf
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