Free Research Paper On Operations Management In Apple
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Operations Management (OM) is the vigilant management of processes in order to produce and distribute products and services. OM includes activities like product creation and development, production, distribution, managing purchases, inventory management, storage, logistics, quality control, and evaluation of the processes. OM is aimed at ensuring efficiency and effectiveness of business processes and is mostly about significant measurement and analysis of internal processes within a company (McNamara).
Operations Management is also involved in the development and deployment of resources, which a company needs to deliver goods and services to customers. It is the designing and administration of products, processes, services and supply chain, to ensure that a company operates at its optimal best. OM involves decisions regarding size and location of manufacturing plants, distribution networks, design of supply chains, structure of telecommunications, layout and structure of offices and productions centers, selection of equipment, maintenance and replacement and production scheduling (MIT Sloan School of Management).
Apple Inc. was founded and incorporated in January 1977 and is involved in the designing, manufacturing and marketing of mobile communication and media devices, personal computers, and portable digital music players. Apple Inc. sells various software, services, networking solutions and digital content and applications including iPhone, iPad, iPod, Mac, Apple TV, the iOS and OS X operating systems, and many more products (Reuters.com)
Quality management is also known as quality control and it entails making sure that all activities required for maintaining excellence in a company, are working well. Quality management is mostly deployed in manufacturing and service companies to ensure that high standards are set and maintained. Apple has been known to always focus more on the quality of products as opposed to just financial gain. As Apple's Senior Vice President of Industrial Design, Sir Jonathan Ive noted in a recent interview:
"We are really pleased with our revenues but our goal isn't to make money," Ive said of Apple. "It sounds a little flippant, but it's the truth. Our goal and what makes us excited is to make great products. If we are successful people will like them and if we are operationally competent, we will make money." (AppleInsider).
Apple Inc. recognizes that great design, innovation and quality are prerequisites of doing successful business. In fact, Apple Inc.’s success has been credited to the company’s unwavering focus on functional, simple and clean designs, which most people are able to relate to. The company appreciates that designing is not easy at all, but is ready and willing to invest in innovativeness and creativity, and to ensure the teams in charge are motivated and driven to stick to this etho (AppleInsider). This focus on quality has ensured that Apple Inc. continues to maintain top position when it comes to design, quality and acceptability by the customer. Maintaining this position in terms of quality control is of essence to Apple Inc. as any loss of focus on the product and its quality would cost the company highly in terms of loyal customers, penetration into the world market, and sales and profitability margins.
Process and Capacity Design
Product management is concerned with various management activities right from the time there is an idea for making a new product, the development of the product, up to the point of providing support and customer care to customers who have bought the new product. Product development is thus a key activity in every company (McNamara). Apple Inc. designers and engineers have always been led by the slogan “stay fully focused on making great products” ever since Steve Jobs led the company and instilled this value in his teams. Apple’s design processes have remained the same over the years and are known for being vibrant and strong statements whenever and wherever they are introduced (Chen & Richtel).
Innovation at Apple has always been a team effort and the culture of groups working together is what Apple is known for since time immemorial. For instance, the industrial design team is a small group of professionals who have worked together for nearly 20 years and so are other product development teams (Chen & Richtel).
In Apple’s innovative culture, a sense of understanding design, developing and making are central. In addition, form, material and processes are completely intertwined so that they work as a package and one cannot do without another, for production of quality products. As well, Apple is always on the lookout of improving their products and using new materials that would make these advancements possible. Processes at Apple are majorly creative, vibrant and continue to grow and evolve over time (Chen & Richtel).
Apple Inc. is great at delivering refreshed and improved products every now and again, while not departing from their quality products. During the time that Tim Cook (now CEO of Apple Inc.) was COO, he is credited with having helped the company to build an effective and competently run supply chain. This led to reduced incidences of error in manufacturing, improvements and adaptations to processes were a constant hence profit margins remained at an all time high, and inventory costing was eradicated at Apple Inc. Tim Cook is believed to have brought this level of expertise in supply chain to the production process too (Etherington).
Apple is constantly changing their products by upgrading their features for the better, and in recent times they have focused on greater flexibility. This according to reports has helped in expanding potential audiences as opposed to alienating existing and older audiences. Apple is very keen not to upset early purchasers of their products, so that a person who bought an iPad three months ago does not regret this purchase when a newer model of the same is released. The flexy and effective product development processes are invaluable to Apple Inc. (Etherington).
Goods and Service Design
Apple’s product development process has been one filled with allure, because of its uniqueness and success outcomes. It is important to note that every product development at Apple begins with the design, and Designers in the company are supported and given the credit they deserve to encourage them to create visionary and outstanding products. As opposed to having the design following manufacturing, finance and other departments, these departments are guided by the design team at Apple Inc. (Panzarino). It is also reported that Designers at Apple Inc. have no contact with the finance department whatsoever, and are given unlimited access to manufacturing and materials that need to be used, without limitation of costs. The Industrial Design Studio is where all Apple products are conceptualized and created, and is only accessible to a few of Apple’s employees of the design team (Panzarino).
When a new product is agreed upon in Apple, a team is put together and isolated from other members of staff through secrecy agreement and even physical barriers. This is meant to ensure that the start-up is not leaked out before it becomes a success, and also to make sure that the responsible team is answerable directly to the team leader, thus eliminating the large and complicated reporting structure that characterizes the big company (Panzarino).
When the design of the new product begins, the Apple New Product Process (ANPP) is launched as well. The ANPP highlights the steps of product development in detail, clearly setting out the stages of creation, responsible persons for the various processes including completion, the persons who will work at each stage and timelines of completion (Panzarino). The Executive Team in charge of the new product processing meets every Monday to see how the product development is coming along. Two weeks is the maximum time taken to make key decisions regarding the product development stage and other important issues (Panzarino).
Once the product so developed begins production process, two people are identified, who are charged with the responsibility of bringing the process to fruitful completion. These two people are the engineering program manager (EPM) and the global supply manager (GSM). While the engineering program manager (EPM) has control of the product process, the two are executives who spend most of their time in China overseeing the production process. In addition, the program manager and the supply manager work in unison and focus on what is best for the product at all times (Panzarino). When a product has been completed, it is designed, built and tested again, by first been sent to manufacturing; a four-six week process which ends with the assembling of responsible Apple Inc. employees at the Apple factory (Panzarino).
The European centers are seen by Apple Inc. as the most advanced green building designs in all their operations, as they will use renewable energy including wind power. In Ireland, Apple Inc. will recover land that was initially used to grow and harvest exotic trees and restore native trees in a local forest. This will impact positively on society as an outdoor education centre for children and local schools, as well as a nature walking trail. Thus, Apple Inc. is more interested in investing in locations that the company can give back to the society in kind through environmentally friendly and social enhancing practices (Associated Press).
The Danish Center will be situated next to a large electrical substation, with aim of capturing excess heat from equipment in the data hub and conducting it into the heating system of the district, to aid in warming homes in the area (Associated Press). This again is a means of giving back to society by Apple Inc. and relating to the consumer on a personal and impactful level, while improving sales and market share for their products.
Layout Design of Apple Stores
Apple Inc. has a Trademark for the unique design of a brick and mortar retail outlets layout. The retail outlet design is an all-glass storefront and façade with lower-level lighting, rectangular-shaped tables, a genius bar and other distinctive designs. The open-space layout is also composed of cantilevered shelves, recessed display spaces on the side walls (Campbell).
Apple Stores, whether in China or the US, are made using identical architecture and design with minimal customizations depending on specific needs and dimensions of the various locations. During the first quarter of 2013, Apple Inc.’s retail sector produced a revenue of $16.5 million from the average 396 stores that were open then. Visitors to Apple stores have been increasing over the years with 2013 getting 121 million visitors for the three month period ending in December, compared to 110 million the past year (Campbell).
An example of the layout design of Apple stores is the Stanford (Calif.) Shopping Center Apple Retail Store, which boasts a unique architectural design characterized by tall glass panels and receding room behind a stone wall. This store is big and is a replacement of a smaller Apple Store that had been housed in the Stanford Mall, to compete with its match the huge Microsoft Store in the same Mall (Allen). The Apple Store measures 6,825 square foot and is divided into two; the front display showcases the usual Apple products, and the back display under arched skylight houses a long Genius Bar in the center, which allows 360-degree access for visitors. The back display also has training and product set up tables, as well as two tables for children. Offices, repair area and stock rooms are in the back and third part of the store. The roof to this state-of-the-art retail store is made from stainless steel to protect the products from the sun and provide aeration to the store. Apple plans to use this same architecture and art for two upcoming stores in downtown Portland (Ore.) and Aix-en-Provence in France (Allen).
Human Resources and Job Design
At Apple, employees get to be well inducted and provided with necessary material and information to make their work easier and enjoyable. Employees receive clear information and guidance as regards their job in the form of clear and precise job descriptions and job summary. Job descriptions normally contain the obligations, activities and restraints all geared towards the employee and details what is to be done, why and where it is to be done and how to go about performing duties outlined. A job summary at Apple outlines the responsibilities, qualifications required for particular job, person specification, who the employee will report to, employment conditions and general conditions of employment (ManagementParadise.com).
The main importance of human resource management is to ensure an amenable and accommodating team is on board at Apple for achievement of required standards and quality products. A complete human resource management entails operational, organizational, personal and societal and a competent human resource manager knows how to juggle and ensure that these four pillars are met optimally (ManagementParadise.com). Apple ensures that the goals and strategies of the company are well defined to managers and other employees to ensure that all are moving in one direction in steering the company’s growth and development. For example, Apple has predefined some objectives for all its project managers, for example portfolio management, business planning, project planning and execution. When these activities are well aligned, they aid in business strategy execution (ManagementParadise.com).
Recruitment is a key part in human resource management, which entails attracting and retaining eligible and competent candidates and matching them with job opportunities in the company. Apple recruits employees in accordance with Americans with Disabilities Act (ADA) and the 1963 Equal Pay Act (EPA), The 1991 Civil Rights Act and the 1995 Congressional Accountability Act, as well as other relevant legislations. Apple is thus competent in product branding, promotions, vending and distributing their products, customer service and even in recruiting candidates (ManagementParadise.com).
At Apple Inc., it is the duty of the Director of Human Resources at Headquarters to complete documents like job description, job classification, recruitment request form, interview questions and other recruitment documentation, before a position is announced. After job vacancies are announced using various medium, they are also circulated to 340 agencies, universities and hiring organizations (ManagementParadise.com).
The first point of recruitment is based on qualifications and experience, followed by performance and face to face interviews, after which a suitable candidate is selected. Reference checks of various kinds; academic, work, financial, personal, and law enforcement are done. After this, a compliance review of candidates documentation, medical examinations, appointment of candidate by HR department and induction processes all follow one another in that order. An induction program at Apple Inc. constitutes a planned introduction to the job, organization and environment, building on familiarity with the job roles and responsibilities. Inductions contribute to improved socialization, reduce new employees’ stress and enhanced organizational commitment (ManagementParadise.com).
Remuneration management where pay is fair and consistent is key in sound human resource management. Apple uses various methods of setting pay rates including collective agreements, individual arrangement and awards. The company uses salary surveys, job evaluation, grading jobs and pricing each pay grade. Apple Inc. is known to have one of the most fair and balanced remuneration policies with friendly salary packages, insurance, and a structured superannuation program. Remuneration at Apple Inc. comprises 401k, health and wellness schemes that are adjustable, reserve procuring schemes, rebates on Apple products, paid vacations, among many other benefits (ManagementParadise.com).
The compensation program at Apple Inc. is meant to engage and absorb the popular class and a healthy combination of workers, encouraging staff members to enhance their efficiency, enhances fair, just and impartial treatment of employees, and also offering periodic reimbursements and efficiency audits (ManagementParadise.com).
Supply Chain Management
In 2013, Apple Inc. emerged winner for the sixth consecutive year on Gartner’s ranking of the top 25 supply chains. Apple got a 75% of the highest possible points in the voting pool that raises awareness on supply chain discipline, and its effect on business (Tyler). Apple spends excessively when necessary, but later reaps the benefits of higher volume business in the long term. Apple operates this way throughout the supply chain right from the design stage all the way to retail. Apple has a unified strategy of focusing on a few product lines and giving them the best, as well as exerting minimal effort in way of customization; and this has been a great business advantage for the company (Satariano & Burrows).
Apple Inc. has built a strong system which allows it to exert control over almost all segments of the supply chain, right from design to the retail store. For instance, Apple gets big discounts on parts due to its huge volume of business, airfreight and manufacturing capacity, logistics and procurement, which are all big areas in the company’s operations. Apple is also renowned for its outstanding innovativeness, marketing and operational expertise and excellence. Due to the competitive advantage when it comes to operations, Apple Inc. has over the years handled major product launches, without having to maintain large inventories, a savings on their part. This cutting edge operational expertise gave Apple the thrust to enter the television market in 2013 with a TV set that is well integrated with iTunes software (Satariano & Burrows).
Inventory management is very important in the success of a company, as Apple Inc. has proved over the years, through the expertise of inventory manager, Tim Cook (now CEO). One of the actions that Tim Cook took was doing away with own manufacturing at Apple, and instead opted for contracted manufacturers. The reasoning behind this was that inventory deprecates very fast and therefore it needed to be controlled and managed professionally. The continually increasing sales that Apple has been enjoying are a great sign of sound inventory management, and Apple has been named as incredible in managing inventory (Victor).
Apple Inc. has been very efficient with its inventory system, such that when someone orders a product online from any part of the world, the product is shipped directly from China to the customer. In addition, Apple Inc. is known for launching a product today and making it available to the customer in days, while other companies take weeks or months to do so (Victor).
The Operations Management at Apple Inc. is largely well managed hence the consistent success of the company. Apple’s focus on ensuring that the product is outstanding no matter what, has been critical in ensuring that the whole process right from designing, product development, manufacturing, distribution, sales, marketing, purchase management, logistics and inventory management, quality control, and evaluation of all these processes is excellent. The company is also keen on ensuring a motivated and well taken care of human resource, a critical part in the production process that cannot be overlooked, in order to achieve effectiveness.
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