2. APPLE Inc.
o Founded April 1, 1976 by Steve Jobs, Steve
Wozniak, Ronald Wayne
o 394 retail stores
o Worldwide operations
o Electronic devices with own software and hardware
o Famous for: iMac, MacBook, iPhone and iPad
o Biggest company on the world based on market
capitalization
4. Apple's supply chain judged best in
world again
o A report by AMR Research has named Apple as the
company with best supply chain practices in the world for the
third year running.
o In a feature exploring the secret behind Apple’s success,
it was found that company’s ability to bring together two sides
of the supply chain (digital and physical) efficiently and at
increasingly low cost.
5. Digital supply chain
• It is a new media term that encompasses the process of the
delivery of digital media, be it music or video, by electronic means
from the point of origin (content provider) to destination (consumer).
The main processes of a digital supply chain are as follows:
• True on-demand product availability
• Ease of use and speed for content search and activation.
• Pricing and subscriptions
• Quality management built on licensing and refunds
6. SUPPLY CHAIN MANAGEMENT…?
Procurement Manufacturing Distribution
Managing flow of... ... in both directions
Supply chain management (SCM) is the management of the flow of
goods and services. It includes the movement and storage of raw
materials, work-in-process inventory, and finished goods from point
of origin to point of consumption.
7. APPLE’S SUPPLY CHAIN MANAGEMENT
Customer comes first ,cost cutting comes second
Set impossible target
Prioritize action
Adopt process view
Simplify product and process
Make radical changes when necessary
Enhance relationship
8. SCM Goal
o Increasing effectiveness and efficiency operational excellence
o Decrease operational costs
o Communication and relationships in a network of companies
9. Importance and value
Companies like Apple:
o Highly innovative
o Short product life cycle
continuous improvement
o High number of competitors
o Limited number of suppliers
o Investments needed
o Trade secrets
o Worldwide operations
o Decreasing margins
Operational Excellence as
competitive advantage
o High control over costs and
information
o Speed product time to
market
o Delivery based on demand
o Increased sales and margins
o High quality
o Reduce inventory levels
10. Material Suppliers of iPhone
o Samsung: The Singapore facility manufactures CPU and Video
processing chips.
o Infineon: The Singapore facility manufactures Baseband
Communications hardware.
o Primax Electronics: The Taiwan facility manufactures Digital
Camera Modules.
o Foxconn International: The Taiwan facility manufactures internal
circuitry.
o Entery Industrial: The Taiwan facility manufactures connectors.
o Cambridge Silicon: The Taiwan facility manufactures bluetooth
chipsets.
o Unicorn Technology: The Taiwan facility manufactures printed
circuit boards.
11. o Catcher Technology: The Taiwan facility manufactures stainless
metal casings.
o Broadcomm: The U.S. based facility builds touch screen controllers.
o Marvell: The U.S. based facility builds 802.11 specific parts.
o China facility assembles the hardware, holds inventory, and
handles the pick, pack, and ship steps of the fulfillment process.
o The iconic iPod and iPhone maker took the top spot
due to "an intoxicating mix of brilliant industrial
design, software interfaces and consumable goods
that are purely digital”.
12. Benefits Apple got from its Supply Chain
Cost :
Reduced inventories
Reduced waste
Reduced total manufacturing costs
Service:
Establishment of a collaborative framework
Near real time information flow
13. Example of Apples success related to SCM
o Design requirements: Light shining through aluminum, holes
invisible to human eye cut with hoard lasers
o Exclusive contract with laser manufacturer (impact on
competitors supply chains)
o Long-term commitment, dependability of supplier on Apple
o High volume, pressure on prices, negotiation high margins
Contracts
earlier in
time
Monitoring
and control
Quick
adaptions
No delays
Lesser sales
loss
14. CHALLENGES FACED BY APPLE Inc.
• Rapidly changing Technology market.
• Decreasing market share
• Global Supply Management
• Governance issues related to different suppliers and different countries.
• Increasing demand/waiting times resulting in unsatisfied customers.
• Fluctuating world economics
• Too many eggs in one basket – Suppliers
• Manufacturing Complexities causing disruptions in Supply Chain.
• High logistics cost with only 1 warehouse – 1 Assembling country – higher lead
times.
• Increasing labor issues in Chinese assembling plants.
15. How does Apple run its supply chain
operations?
• In a nutshell, Apple purchases components and materials from
various suppliers, then gets them shipped to the assembling
plant in China.
• From there, products are shipped directly to consumers (via
UPS/FedEx) who bought from Apple's Online Store.
• For other distribution channels such as retail stores and other
distributors, Apple keeps products at Elk Grove, California
(where central warehouse and call centre are located) and ships
products from there.
• At the end of product's life, customer can send products back to
nearest Apple Stores or dedicated recycling facilities.
