individu alassignment suggest improvements for the firms current supply chain

This report aims to analyze and evaluate Apple''''s supply chain management, including its strategy, tactics, andphilosophy, and suggest improvements for the company''''s current supply chain.

INDIVIDUAL ASSIGNMENT

SCM201

Lecturer: Nguyễn Hữu Hoàng Giao

Class: IB1712

Student’s name: Đỗ Đăng Khoa

Student Code: SS170693

TABLE OF CONTENTS

1 INTRODUCTION 2

2.THE STRATEGY OF APPLE COMPANY 2

2.1 The Supplier 2

2.2 Inbound logistics 4

2.3 Outbound logistics: 5

2.4 Resellers 5

3 THE TACTICS 6

4 CORE VALUE 7

5 EVALUATE APPLE’S SUPPLY CHAIN MANAGEMENT .7

5.1 Advantages: 7

5.2 Drawbacks: 8

6 SUGGEST IMPROVEMENTS FOR THE FIRM’S CURRENT SUPPLY CHAIN 9

7 CONCLUSION 9

8 REFERENCES……….10

1, INTRODUCTION

Apple is one of the world's leading technology companies, renowned for its innovative products and exceptional customer experience One key factor contributing to Apple's success is its highly efficient and effective supply chain management This report aims to analyze and evaluate Apple's supply chain management, including its strategy, tactics, and philosophy, and suggest improvements for the company's current supply chain

2, THE STRATEGY OF APPLE COMPANY

Apple has different strategies to effectively manage each component of its supply chain, including suppliers, inbound logistics, production, outbound logistics, and dealers

2.1 The Supplier

The supply chain strategy of Apple primarily relies on its suppliers who provide raw materials, components, and finished products necessary for the production of Apple's products The company maintains long-term relationships with its key suppliers and collaborates closely with them to ensure the quality and availability of raw materials To manage its supplier relationships, Apple employs several strategies, including:

Vertical integration: This involves controlling the final product as well as its constituent parts This allows Apple to have greater control over the quality, design, innovation, and customer experience Apple's supply chain management is also highly efficient and effective, as the company can sell inventory within 3 days and reduce costs by

outsourcing manufacturing to countries with lower costs Gartner has ranked Apple's supply chain as the best in the world since 2013

Supplier diversification: Apple collaborated with multiple suppliers such as 3M Company, AGC Incorporated, ams AG, among others, to reduce dependence on a few key

suppliers and mitigate the risk of supply chain disruptions As evidenced by the recent incident of a fire at Foxlink-Apple's supplier in India, which affected the production of iPhone charging cables, Apple seeks to expand its supplier base to prevent potential disruptions to its product manufacturing

Expand suppliers of products: To minimize risks, Apple has made efforts to broaden its pool of raw material suppliers to ensure that its production processes are not severely impacted This approach reflects Apple's proactive measures to mitigate supply chain disruptions and highlights the importance of supplier diversification as a key component

of effective supply chain management

Supplier responsibilities: Apple holds its suppliers accountable for their labor and human rights practices, health and safety, environmental management, and ethics by providing them with a set of standards and expectations Additionally, Apple offers training, education, and support to help its suppliers improve their performance and comply with Apple's requirements In case any supplier violates human rights or any standard within the set of requirements, Apple ceases collaboration with that supplier Apple monitors its suppliers through independent assessment channels, on-site audits, and corrective action plans

Apple's proactive approach to supplier responsibility and sustainability reflects its commitment to ethical business practices and corporate social responsibility By holding its suppliers accountable for their actions and ensuring that they adhere to strict standards, Apple aims to create a sustainable and responsible supply chain that benefits not only the company but also its stakeholders and the broader community

2.2 Inbound logistics

Apple's input logistics strategies are the activities and processes that involve sourcing, procuring, and storing the raw materials and components needed for its products and services Some of Apple's input logistics strategies are:

Development of long-term relationships with their primary suppliers and negotiating

favorable contracts with them This approach fosters trust and sustainable relationships, enabling Apple to consistently supply high-quality materials and components

Building relationships with primary suppliers, Apple has diversified its supply base

and geographically located its suppliers to reduce risk and ensure a continuous supply It has allowed Apple to establish a global supply chain and distribution network, enabling them to serve customers and small retail outlets in many countries around the world, while minimizing the risk of supply chain disruptions

To ensure high-quality standards for materials and components, Apple implements

rigorous quality control measures By doing so, they can compare and prioritize their suppliers, selecting those that can provide high-quality raw materials and limiting the risks of product defects or equipment malfunctions This ultimately helps to increase revenue and profits by reducing costly recalls and returns

Embraced sustainable practices such as using renewable energy, recycled materials, and

waste reduction in their operations Not only does this benefit society and the

environment, but it also helps to build its reputation as a company that prioritizes environmental protection This approach attracts customers who are more

environmentally conscious and provides them with confidence in using Apple products

2.3 Outbound logistics:

Apple's outbound logistics strategy is centered on ensuring that its products are delivered

to customers in a timely and efficient manner Some of strategies :

Centralized logistics: Apple uses a centralized distribution model, which allows it to

control inventory and fulfill orders across multiple channels This enables Apple to deliver products more quickly, cut costs, and reduce the risk of overstocking or stockouts

Direct-to-consumer sales: Apple sells its products to consumers directly through online

and physical retail stores This gives Apple more power over pricing, branding, customer experience, and data It also aids Apple in developing customer loyalty and trust

Close relationships with carriers: Apple collaborates closely with carriers such as

FedEx, UPS, and DHL to ensure that its products are delivered on time and reliably To reduce shipping costs, Apple negotiates favorable terms and prices with these carriers Furthermore, Apple transports some of its products internally using its network of planes and trucks

=> Outbound logistics has become even more important in the pre-and post-COVID-19 eras, as COVID-19 has accelerated long-standing business trends, such as the significant shift of consumers to digital channels

2.4 Resellers

Apple's resellers’ strategy focuses on ensuring their products are available to customers through a network of authorized agents To achieve this, the company has done:

Maintaining quality standards and customer satisfaction: Apple provides training and support

to its authorized agents to ensure they provide consistent and high-quality service to customers Apple also monitors customer feedback and satisfaction ratings to identify areas for

improvement

Managing pricing policies and avoiding channel conflicts: Apple sets minimum advertised

prices (MAP) for its products that resellers must comply with to avoid being undercut by their own online or retail stores Apple also provides incentives and rewards for agents who achieve or exceed sales targets

Ensuring agents comply with Apple's supplier responsibility program: Apple requires its

agents to adhere to its code of conduct, which includes labor rights, environmental protection, health and safety, ethics, and management systems Apple also conducts checks and assessments

of agents' performance on these aspects

3, THE TACTICS

Apple's supply chain management tactics are designed to maintain efficiency and effectiveness One of the key tactics is a focus on non-seasonal products with a long lifecycle of more than 12 months Additionally, Apple has streamlined its supply chain by reducing the number of storage locations, leaving only one central warehouse in California This allows for more efficient data synchronization between the central warehouse and Apple stores and customers To maintain innovation and quality, Apple negotiates long-term contracts with a reduced number of key suppliers The company also outsources production to contract manufacturers while maintaining tight control over quality and design To transport components and products, Apple uses air and sea shipping The company delivers products directly to customers who order online or to authorized retailers and resellers Finally, Apple provides training and support to its agents

to ensure customer satisfaction These tactics have allowed Apple to maintain a competitive edge in the market and establish a loyal customer base

4 CORE VALUE

The core values of Apple are centered on innovation, design, quality, and simplicity These values are reflected in the company's products, services, and business

operations:

The core values include innovation, where Apple is committed to pushing the boundaries

of what is possible with new technology and design This commitment to innovation is evident in the company's breakthrough products such as the iPhone, iPad, and MacBook Apple is also known for its sleek and elegant product designs that are both visually appealing and highly functional The company's design philosophy is based on simple, minimalistic, and user-friendly principles

Furthermore, Apple is committed to providing high-quality products and services to its customers The company's quality standards are evident in its strict product testing and quality control processes, as well as its emphasis on customer satisfaction

Finally, Apple believes in making technology simple and intuitive for everyone to use The company designs its products with the user at the centre and aims to provide a seamless and intuitive user experience Overall, these core values have helped Apple establish a strong brand identity and an outstanding reputation in the technology industry, which are the driving forces behind the company's continued success and growth

5 EVALUATE APPLE’S SUPPLY CHAIN MANAGEMENT

5.1 Advantages:

Efficient Operations: Apple's supply chain management is designed to ensure efficient and streamlined operations from end to end By implementing tactics such as just-in-time inventory management, vertical integration, centralized logistics, and automation, the company is able to minimize waste, reduce costs, and improve production efficiency High-Quality Products: Apple places a strong emphasis on quality in all aspects of its operations, from product design to manufacturing and delivery By maintaining close relationships with its suppliers and conducting regular audits to ensure compliance with its Supplier Code of Conduct, the company is able to ensure that its products are of consistently high quality

Strong Brand Reputation: Apple's focus on innovation, design, quality, and simplicity has helped the company to establish a strong brand identity and reputation for excellence

in the technology industry This reputation has translated into a loyal customer base and strong market position

Global Reach: Apple has a global supply chain management network that enables the company to source materials and manufacture products in different regions of the world, while still maintaining consistent quality standards and efficient operations

5.2 Drawbacks:

Dependence on Key Suppliers: Apple relies heavily on a few key suppliers for critical components such as processors, displays, and memory This dependence can create supply chain risks, as any disruptions or quality issues with these suppliers can impact Apple's ability to manufacture products and meet demand

High Production Costs: Apple's focus on quality and innovation often results in higher production costs compared to its competitors This can make it difficult for the company

to compete on price, particularly in price-sensitive markets

Ethical Concerns: Apple has faced criticism in the past over ethical concerns related to its supply chain management practices, particularly around labor conditions and environmental sustainability While the company has taken steps to address these concerns, they remain a potential drawback to its supply chain management reputation

6, SUGGEST IMPROVEMENTS FOR THE FIRM’S CURRENT SUPPLY CHAIN.

Adopting sustainable business practices is becoming increasingly crucial for companies seeking to balance economic prosperity with environmental responsibility In this context,

the agricultural and electronics industries face unique challenges related to production processes, material sourcing, and waste management:

To address these challenges, companies such as Apple are adopting innovative strategies

to promote sustainability throughout their supply chains One such strategy involves adopting more integrated horticultural practices that can increase economic benefits while reducing environmental impacts

Additionally, diversifying the supplier base and sourcing locations can mitigate risks and disruptions caused by geopolitical or health crises

Developing in-house chips and components can reduce dependence on external suppliers and enhance product performance while pursuing the goal of a closed-loop supply chain can minimize waste and promote the use of recyclable or renewable materials

=> These strategies reflect Apple's commitment to sustainability and its role in promoting environmentally responsible business practices

7 CONCLUSION

Through the report, we can see an overview of the theories we have learned, through the strategies, tactics, and problems that apple implemented and encountered Apple's work has proven itself to be one of the world's leading supply chains, staying flexible, responsive, and responding to changes in demand quickly and easily, and getting it done promptly with high quality

8, REFERENCES

1 Anon., 2021 2021 Apple Supplier List [Online]

Available at: https://www.apple.com/supplier-responsibility/pdf/Apple-Supplier-List.pdf

2 Apple, 2007 Apple's Homepage [Online]

Available at: https://www.apple.com/

3 Evans, J., 2021 COMPUTERWORLD [Online]

Available at: https://www.computerworld.com/article/3633633/apples-challenge-now-innovation-at-scale.html

4 Evans, J., 2022 COMPUTERWORLD [Online]

Available at: https://www.computerworld.com/article/3647211/supply-chain-disruption-apple-and-the-importance-of-ops.html

5 Hansen, J M P a M T., 2020 HARVARD BUSINESS REVIEW [Online]

Available at: https://hbr.org/2020/11/how-apple-is-organized-for-innovation

6 Matsuda, A., 2022 THE WALL STREET JOURNAL [Online]

Available at: https://www.wsj.com/articles/direct-to-consumer-sales-are-fueling-supply-chain-tech-growth-11659787201

7 Naidu-Ghelani, R., 2013 10 Significant Apple Business Partners [Online]

Available at: https://www.cnbc.com/2011/08/25/10-Significant-Apple-Business-Partners.html

8 page, A o., 2020 APPLE [Online]

Available at: https://www.apple.com/newsroom/2020/07/apple-commits-to-be-100-percent-carbon-neutral-for-its-supply-chain-and-products-by-2030/

9 page, A o., 2022 Supple chain today [Online]

Available at: https://www.supplychaintoday.com/apple-supply-chain-strategy/

10 page, A o., 2023 Business Strategy Hub [Online]

Available at: https://bstrategyhub.com/apple-mission-statement-vision-core-values/

11 QuickBooks, 2020 QuickBooks Blog [Online]

Available at: https://quickbooks.intuit.com/r/supply-chain/apple-the-best-supply-chain-in-the-world/