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Assignment 2: Submitted by Sagar Arora

Apple has consistently ranked as the top supply chain in the world due to streamlining processes like consolidating warehouses, synchronizing data, outsourcing manufacturing, and partnering with few key suppliers. They face challenges like global economic impacts, inventory obsolescence, and supply disruptions but overcome these through customer-focused innovation and adapting their supply chain operations. Key factors in their success are continuous process improvements, exceptional inventory management, and evolving to meet changing customer demands.

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Sharry Arora
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104 views7 pages

Assignment 2: Submitted by Sagar Arora

Apple has consistently ranked as the top supply chain in the world due to streamlining processes like consolidating warehouses, synchronizing data, outsourcing manufacturing, and partnering with few key suppliers. They face challenges like global economic impacts, inventory obsolescence, and supply disruptions but overcome these through customer-focused innovation and adapting their supply chain operations. Key factors in their success are continuous process improvements, exceptional inventory management, and evolving to meet changing customer demands.

Uploaded by

Sharry Arora
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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SUBMITTED BY

SAGAR ARORA
A00118051

ASSIGNMENT 2
SUPPLY CHAIN PROCESS OF APPLE
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Apple: A Global Leader in Supply Chain Management


Company: Apple Inc
Industry: Technology/Computer Hardware & Software
CEO: Tim Cook
Web References: Apple Inc
Overview of Apple Inc.
Apple Inc., formerly Apple Computer, Inc. was founded by Steve Jobs, Steve Wozniak and
Ronald Wayne on April 1, 1976. By the summer of 1976 Ronald Wayne had left the
company but the two Steve’s persevered and launched the Apple 1 Computer.  This was the first
of many trend setting products to be developed and released by Apple over it’s now near 40-year
history.
 Cook is a world-renowned supply chain expert who is credited with streamlining Apple’s supply
chain, helping create the most powerful supply chain in the world. Today Apple Inc. is a world
leader in innovation, product design and development, branding, marketing and
software ecosystems. Its products and services include: iPhone, iPad, iPod, Mac, Apple
TV, Apple Watch, a portfolio of software applications, operating
systems, iCloud, accessories, service and support offering.  They sell Apple products through
their retail stores, online stores, direct sales force, third-party cellular network carriers,
wholesalers, and retailers.  They also sell digital content and apps through the iTunes
Store, iBook Store, and Mac App Store.
A Glimpse into Apple’s Ever Evolving Supply Chain

When it comes to Apple’s supply chain management (SCM) practices, there are conflicting
views on their success but many people believe that its supply chain model, extraordinary
inventory control and sophisticated software systems are the secret weapons that keep them on
top of the global leader board.

Apple’s Supply Chain has ranked #1 in the world each year from 2010 to 2013 by research
firm Gartner. In 2014 Gartner placed Apple in a new master’s category for
demonstrating sustained leadership in their supply chain and defining the very notion of a
“solution” supply chain, blazing new trails with its demand creation capabilities.
Page |2

Supply Chain Planning at Apple Inc 

1. Research and Development. At this stage, the company develops new technologies,
designs new products, licenses the intellectual property and purchases third-party
businesses.

2. Concept testing. This activity involves market research, product testing and quality
assurance.

3. Pre-launch. During the pre-launch stage, the company fixes the found issues, provides
software for the new products and makes prepayments to the suppliers.

4. Launch. After the launch, the company makes the demand forecast for the next 150 days.
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5. Quarterly reviews. During the quarterly reviews, the company checks the inventory
levels, analyzes the product life-cycles, adjusts the demand forecasts and monitors the
current sales levels and costs trends.

And this is how the supply chain management Apple processes take place:

1. Sourcing. At this stage, Apple acquires components and materials from their suppliers, and
then ships them to the outsourced assembly plant in China.

2. Manufacturing. The products are manufactured at the assembly plant in China.

3. Warehousing. The manufactured products are shipped from China directly to the


consumers who order them online (drop shipping) by using the services of third-party
shippers such as FedEx or UPS. They can also be shipped to the central warehouse location
in California.

4. Distribution. The products are distributed from the central warehouse location to retail
stores, wholesalers and network carriers.

5. Return. At the end of a product’s life-cycle, the consumers can participate in the
recycle/reuse program and send the products back to nearest Apple stores or specialized
recycling plants.

Supply Chain Map of Apple Inc


Page |4

Other distribution channels (retail stores and distributors), Apple stores products at their central
warehouse/call center in Elk Grove, California 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.

Key Factors Contributing to the Success of Apple’s Supply Chain

When Tim Cook came onboard, he realized Apple’s supply chain was too complex.  He made
drastic changes over the years to streamline the process, generating huge cost savings and
improving service by:

 focusing on making great products using ground breaking innovation


 supplying products that are not seasonal and have a life cycle of more than 12 months
 reducing the number of warehouses to one centralized location in California
 synchronizing data between the central warehouse and its own stores and customers,
making operations more efficient and cost-effective
 outsourcing manufacturing and as a result reducing the manufacturing cycle time
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 reducing the number of key suppliers involved in manufacturing, shipping and storing
 requesting price reductions and asking suppliers to relocate closer to Apple’s factories
 extraordinary inventory management

Apple’s Supply Chain Challenges

 Global economy could affect the Company


 Some re-sellers may also distribute products from the competing manufacturers
 Inventories can become obsolete or exceed the anticipated demand
 Some components are currently obtained from the single or limited sources
 Some custom components are not common to the rest of the industries
 Ability to obtain components in sufficient quantities is important
 Supply chain disruption such as the natural and man-made disasters can be serious
 Company depends on logistical services provided by outsourcing partners
 Company also relies on its partners to adhere to supplier code of conduct

Lessons Learned
While challenges with supply chain responsibility are not unique to Apple, the company’s record
profits and tremendous brand value make it an easy and highly visible target. Despite the fact
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that Apple’s supply chain has faced challenges, they continue to be a global leader in SCM.  Key
factors attributing to their success include: putting their customers first, streamlining processes to
create exceptional inventory management, outsourcing manufacturing, and by continuing to
evolve their supply chain to adapt to customer demands.

References
Adam Shrum. (2018, March 28). Retrieved from https://www.dynamicinventory.net/apple-best-supply-
chain-management-company/

kblack12 . (2015, june 25). Social Media for Business Performance. Retrieved from
https://smbp.uwaterloo.ca/2015/06/apple-a-global-leader-in-supply-chain-management/

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