Apple And Global Supply Chain Management Essays Example
Type of paper: Essay
Topic: Apple, Steve Jobs, Business, Products, World, Supply, Supply Chain, Company
Apple is one of the largest companies in the world. In recent years, the company has rolled out some of the most important and well-received products in the consumer electronics market; it has become known around the world for its innovative and interesting designs insofar as its phones, tablets, and computers are concerned. These products are designed in such a way that they are appealing to a wide array of people; although Apple products are not flawless and are more expensive than their competitors in many ways, the cult of the company is such that Apple has become highly interesting to many different types of people.
In this discussion, the global supply chain management structure for Apple will be examined. Apple is the very image of the globalized company, with millions of their patented iPhones being sold each year around the world (University of San Francisco Online, 2015). Understanding how the company has established its global brand in terms of supply chain management is incredibly important, because Apple is one of the most powerful technology companies on the planet. The fiscal power of Apple alone is impressive, and much of this power was built based on the ability of the company to manage its image and its global supply chain.
Apple’s interaction with the globalized world, the strategies they employ in supply chain management, and the push and pull processes that are important in the functioning of the company will all be discussed here. The company has faced a number of significant challenges over the years, but has come to recognize and handle adversity in an incredibly productive way (University of San Francisco Online, 2015). This is one of the reasons that the company as a whole has been so successful in the global market (University of San Francisco Online, 2015).
Apple is one of the most powerful technology companies in the world. While Microsoft may make and sell more computers, the existence of the iPad and iPhone have launched Apple into a new level of importance insofar as the technology world is concerned. Apple products have long been considered interesting and important based on their innovative nature (Apple, 2015). Apple has long tried to emphasize the integration of aesthetics, form, and function into their products; the result is a functional product that is appealing to a wide array of people, rather than a product that is cheaper and available to a wide array of people (University of San Francisco Online, 2015). Because of the price and the nature of the products, Apple has come to have something of a following of customers; the world of the computer, for instance, is really split into those who enjoy Apple products and those who enjoy Microsoft products (University of San Francisco Online, 2015).
In 2012, Apple reported revenue of $54.5 billion USD; this is due in large part to a record number of sales on iPads and iPhones. These products have become the most important flagship products for the company, and are now where the company is focusing much of its time and energy (University of San Francisco Online, 2015). Since the introduction of the iPad and the iPhone into the market, the market share for Apple has increased dramatically. Experts expect the market share to continue to increase, because it seems highly unlikely that the market will allow the iPad and the iPhone to fall out of favor with consumers (University of San Francisco Online, 2015).
GLOBALIZATION AND SUPPLY CHAIN MANAGEMENT
Like many companies, for a long time, Apple based most of its production in China. China is an easy place to have production stationed; it is a relatively cheap place to station production, and it allows for fast turnover of products in the globalized world (Connelly, Ketchen and Hult, 2013). However, there are also many problems that arise when a company utilizes another country—especially one like China—to build its infrastructure.
Apple has noted that there are a few problems that are associated with using China for production, and have definitely begun to cut back on the use of Chinese factories in the production of their products. The University of San Francisco Online (2015) writes, “in December 2012, Apple said it would once again locate some of its manufacturing operations in the United States, about 10 years after it halted production here. Apple said it would spend about $100 million to manufacture Mac computers in the United States. The company reported that it sold 4.1 million Macs during the fiscal quarter than ended in December 2012, down from 5.2 million during the same period in 2011” (University of San Francisco Online, 2015). The company is experiencing a number of significant changes in supply chain management that must be addressed; the fewer numbers of computers that were sold was also a mitigating factor in the decision to move some of the important manufacturing away from the developing world (University of San Francisco Online, 2015).
The article goes on to suggest that there are several factors that are influencing the ways in which supply chain management are handled. The article states that there are important factors at play, including “rising prices for natural gas and oil in China and other developing nations, as well as shrinking wage gaps between US-based and overseas workers. The lower transportation costs and faster time-to-marketmay also help companies to return stateside” (University of San Francisco Online, 2015). This is an interesting phenomenon in supply chain management—instead of seeing an increasing reliance on the developing world, we are seeing the use of manufacturing in the developing world shrinking in many key ways (University of San Francisco Online, 2015).
STRATEGIES UTILIZED IN GLOBAL SUPPLY CHAIN MANAGEMENT
Supply chain management processes can be associated with efficiency or responsiveness. This means that when a customer uses a specific company, that company can respond with an inclination towards efficiency, or an inclination towards responsiveness; this may seem as though they are the same thing, but they are really very different in their development and execution (Connelly, Ketchen and Hult, 2013).
Each of these types of organization—efficiency and responsiveness—has subcategories that allow a business to specialize their specific supply chain management strategy within their organization and their niche within the business world (Connelly, Ketchen and Hult, 2013). Those that are oriented towards efficiency may focus on continuous-flow, efficient, or fast processes; those which are more oriented towards responsiveness will be agile, custom-configured, or flexible (Connelly, Ketchen and Hult, 2013). Of course, the successful supply chain management strategy will contain elements of all of these different strategies. However, all companies must be able and willing to focus more heavily on one strategy than another, so that they can properly assess and manage customer needs without losing significant portions of their customer base (Connelly, Ketchen and Hult, 2013).
Not all customers have the same set of needs, and Apple customers buy their products for a different reason than those same customers may buy cleaning products, or other products they use in their lives. Apple products can be considered to be custom-configured, with the supply chain oriented heavily towards responsiveness; although the Apple supply chain is very efficient, it is also oriented towards the end user and the perception of the product (Connelly, Ketchen and Hult, 2013). There are also elements of agility in the supply chain, which can be seen in the insanity that often happens when a new Apple product is released—the company is able to see and adapt to the demands of the consumer as these demands happen, and does not allow scarcity of the product unless it is intentional scarcity (Connelly, Ketchen and Hult, 2013).
PUSH AND PULL PROCESSES
The Apple market share cannot be considered a “push” process anymore. Apple is too involved in the market to be considered the subject of the market “push”—Apple consumers are not speculating on the availability, desirability, or value of the products that Apple produces any longer (Supplychainopz.com, 2015). There is no doubt that Apple products have significant value in the business world—these products have become staples for people in the technology sector around the world. Apple has created a niche that no longer fits with the idea of developing a “push” process for their market share (Supplychainopz.com, 2015). While there are still elements of push processes in their market share, Apple’s business does not rely on the push speculation any longer (Supplychainopz.com, 2015).
Demand for Apple products is very real and very intense. On the release day for new products, people will line up outside Apple stores to get the new iPhone or iPad; these people will pre-order their product weeks, if not months in advance, and then spend plenty of time waiting for their product in the elements. This is almost certainly indicative of a pull economic process. The demand that exists for Apple products is real and self-perpetuating; there is no sense of speculation in the development of these demand processes, only true demand from inside the consumer electronics market (Maltz, 2012).
DISCUSSION AND CONCLUSIONS
Apple is one of the most interesting faces in the consumer electronics market today. The company has built an incredibly competitive market share on a few key products, and have done extraordinarily well managing their global supply chain and international brand. The international branding that Apple has done has helped boost their image into what it is today; without all this international branding and forethought insofar as the global supply chain management situation is concerned, Apple would not have been as successful as they are today.
It can be difficult to analyze a global supply chain management system for a company as complex as Apple, but there are a number of key features to the system; these features are what have allowed Apple to continue the global levels of success that shareholders and consumers have come to expect from Apple as a consumer electronics powerhouse.
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Connelly, B., Ketchen, D., & Hult, G. (2013). Global Supply Chain Management: Toward a Theoretically Driven Research Agenda. Global Strategy Journal, 3(3), 227-243. doi:10.1111/j.2042-5805.2013.01041.x
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