Apples Logistics and Supply Chain Management †Free Samples

Question: Discuss about the Apple's Logistics and Supply Chain Management (SCM). Answer: Background of the study: This is a continuation assignment of (Part: 1) where few very important concepts related to logistics and supply chain management had been discussed. This study specifically covers the logistics and supply chain management in context to Apple Inc. The study is primarily focused on supporting information systems and physical logistics network in context to Apple Inc. Moreover, it also studies the supply chain operation of Apple to understand how it manages the operation and what the challenges are. The study makes its readers understand the complexity of supply chain operation and also provides the relevant strategies to reduce the complexity. Case study: Apple Inc. is popularly known for various popular products like Macintosh Computer, the iPod, the iPads and the iPhone. They are moving ahead with innovative strategies which are also evident in a series of different products. The innovation gets paid also as target customers react to it positively. As understood by Lockamy III (2017), Apples organizational culture is one of the reasons that encourage them for being innovative. Employees are rather encouraged for innovative strategies. Consequently, they are able to deliver the success in each of the product lines that they had so far offered to the market. In addition to the organizational culture, it is much more important how Apple manages the complexity of supply chain operation. Lockamy III (2017) has further indicated towards the risks that Apple faces while managing the supply chain operation. The risks can be classified into five categories like country risk, commercial risk, business climate risk, corruption risk and logistics risk. Country risk means the economic and the sovereign issues that affect the supplier-buyer relationships at the international level. Moreover, both suppliers and the buyers find this challenging to maintain an effective relationship. In addition to this, economic turbulence, the countrys political behaviour and volatile behaviour of exchange rates are the other countries related risks. Country-specific risks are threatening due to the proliferation of global supply chains (Lockamy III 2017). Business climate risk can be assumed as a part of country risk which comprises of economic, financial, social, Legal, environmental and political turbulence. Commercial risk can be understood as a capability of a firm to mitigate the country-specific income challenges on its own financial and market capabilities. Logistics risks include a systematic management of warehousing, transportation, distribution, and packaging of materials (Lockamy III 2017). This is also related to inventory management and reverse logistics (Govindan, Soleimani and Kannan 2015). A corruption or in specific the political corruption may be understood as a process that pronounces the weak status of the country-specific government. Moreover, such political state is not so favourable for a healthy logistics management. Few of the risks that the Apple's supply chain operations face has been discussed earlier. Now, some more challenges in regards to supply chain operation can also be discussed. Criticisms have been raised against Apples supply chain which is very complex given a fact that disruptive technologies could have solved the complexity to a fair level. However, they are apparently missing the innovation which could have cracked the challenge. They outsource each and every product to third parties (Khan, Alam and Alam 2015). This could not have been the problem; however, they themselves face the challenge to maintain effective relations with suppliers. The fact is evident from one of such examples when one of the biggest suppliers of Apple couldnt fulfil the demand called by Apple. The Chairman of Hon Hai Precision Industry Co. has confirmed that they could not fulfil the demands of Apple in 2012. Since then, Apple has always struggled to fulfil the demands of their customers for iPhone (Khan , Alam and Alam 2015). This could also be said that Apple has struggled to make an efficient forecast when being compared with Amazon. Given the fact that Amazon manages a roughly around 135 million items in its catalogue whereas Apple roughly manages only 26,000, it looks like that Apple is not doing the greatest job (Khan, Alam and Alam 2015). They have less number of items in comparison to Amazon but, still, they are not capable to have an effective forecast of their customer needs. Another issue that Apple faces is they outsourced each and every product to third parties. It looks like as if they struggle to manage effective relations with suppliers. It may be because they keep everything hidden from their suppliers until they are being exposed to a new project. Suppliers seem like not getting enough time to judge the amount of time which the project will consume. As a consequence, they feel like being under immense pressure and hence, fail to deliver the required needs (Hsu, Tan and Mohamad Zailani 201 6). It is not that they are totally inept in managing supply chain; it is just that they lack innovation which is necessary to earn success in supply chain operation. They have taken some initiatives; however, they have not been able to resolve the challenges of supply chain though being quite successful in impressing the customers. They have reduced the product line from 350 products offered before 1998 to 10 at the moment (Khan, Alam and Alam 2015). It is a courageous decision and is very rare in practice as well. They are also publishing the list of their suppliers which they have not been doing in past. They now work with a relatively small number of suppliers which is why their reputation is directly linked to the suppliers. The strategy is advantageous to Apple to some extent as well. They are giving enough works to their limited number of suppliers which is why they are never short of work. This is why Apple had the leverage to negotiate the price (Khan, Alam and Alam 2015). Despite the aforesaid strategies which Apple had adopted now, they still lack innovative thoughts. There is a need for updated technologies, so that, Apple could explore a wide horizon of supply chain expertise. This is necessary to reduce the cases of products shortage, so that, customers could get their required products on time (Brandenburg et al. 2014). Findings from literature review: It has been observed earlier in the literature review section covered in the first part of this assignment that information and communication technology (ICT) has its impact on the logistics and supply chain operation. The assignment task is also based on understanding the importance of physical logistics network and the supporting information systems. Hence, the literature review section covered earlier in Part 1 of this assignment is very much on the same line and does speak up a very important factor the information systems. The information and communication technology (ICT) as found in the literature review section can be held as a very important factor for an effective operation of the supply chain. The case study on Apples supply chain has revealed a few very important points which cite the importance of ICT in supply chain and logistics operation. As opined by Mellat-Parast and E. Spillan (2014), supply chain management is related to the flow of information and product between the suppliers and the manufacturers. Suppliers require the information systems when manufacturers hand over them a certain order. They needed this information to understand the estimated cost and time period for the given project. Additionally, they do also require understanding the priority level of the orders. In addition, they do also require knowing the quality of materials that are required and others. Such requirements may take longer than the expected time period if not being handled with relevant technologies. Technolog ies may also help to reduce the total cost (Saenz and Koufteros 2015). According to Beske-Janssen, Johnson, and Schaltegger (2015), the use of IT application in supply chain management can produce ample of benefits. Such benefits are but not limited to like as the following: IT applications help to communicate and collaborate with the global suppliers more effectively. It enables to identify that what the customer needs and what is being produced. It also helps to analyze the organizational resource capabilities which are required to take the better advantage of the available resources. It also helps to improve communication between the suppliers and the manufacturers at the global level. Most importantly it provides assistance in designing the logistics network following which the information can be sent to suppliers and products can be received by the manufacturers. Additionally, this also helps to track different other tasks as well as the logistics operation. Logistics operation needs to be controlled by effective technologies, so that, forecast capability gets increased and cost of production gets reduced. Network design does not only provide assistance to aforesaid tasks but, it also helps to facilitate a network that is being followed during the entire supply chain process. Products after being manufactured are then sent to the warehouse where packaging and labelling are done. If this is not directed to effective technologies, the process may get delayed or may also have some shortcomings like the lack of proper communication may result in an unexpected outcome. Nevertheless, such outcomes are not a very healthy sign for being competitive in the market. The information and communication technology may also provide an improved understanding of warehouse work activities. Moreover, the required changes may also remain unidentified if there is an improper or probably no use of the ICT system. ICT helps to optimize the day-to-day fleet routine which helps to slash costs and improve consumer satisfaction. In the opinion of Mota et al. (2015), supply chains can be termed effective when they have efficient processes along with it the processes are flexible reliable also. According to Mota et al. (2015), latest technologies have been effectively facilitating these goals. A large deployment of wireless technologies is already in practice in the logistics and supply chain operations. However, the real-time tracking of shipment does require the use of innovative technologies. In addition; accurate delivery systems do also need the application of innovative technologies. However, adopting new technologies can be problematic for few companies as they tend to be around the traditional technologies that they have been using in past. Alftan et al. (2015) have encouraged the uses of information systems in the supply chain operation. More importantly, they have given additional emphasis on managing the information systems. A proper information flow in a supply chain network is immensely required. Customers are the one who creates the requirement for a particular product. The information requires certain path through which it travels to the manufacturers. Manufacturers then pass it to the suppliers which do the needful activities. Once the product is ready, it is being delivered to the company's warehouse where packaging and labelling take place. Once the product is ready to hit the market, it is then made available to customers. This is indeed a long and complex task where lots of information processing is done. If such information is not helped by effective technologies, the flow may be disrupted and the process may experience a failure in regards to either the product quality or it may also get delayed. Findings from the case study: The case study on the Apples supply chain management has provided few very important finds which validates a point that Apple lacks in technological advancement. They have been using useful strategies as they have cut their products to concentrate on few products only. Additionally, they also started to publish the list of their suppliers to bring transparency in the business. They have also started screening the new and monitoring the existing suppliers (Lockamy III 2017). Despite the few very important strategic changes they have not been able to pronounce their effectiveness in supply chain operation. They have struggled to maintain a fair relationship with their suppliers. They had outsourced the entire manufacturing to third parties; however, they could not control the entire processing which is also evident through Apples relationship with suppliers (Lockamy III 2017). One of such occasions has had happened in 2012 when one of the biggest suppliers of Apple failed to deliver th e called products. They are found pressurizing the suppliers; however, their suppliers are in limited numbers and are directly linked to their reputation (Lockamy III 2017). Justifying the assignment task: The assignment task states that physical logistics network and the supportive information systems are of equal importance in the context of logistics and supply chain operation. The statement appears true in the light of findings from the case study and the literature review. In the case study, it was highlighted that one of the biggest suppliers of Apple had failed to deliver the required quantity in the given period of time. It appears that Apple had put immense pressure on that occasion. Additionally, it was one of the strategies of Apple that they do not disclose the concept behind a particular project in order to keep it safe from being imitated by others. Moreover, they had followed the same strategy but failed to measure that ordered quantity could be a burden on the supplier (Jothimani and Sarmah 2014). In this incident, there was a gap of communication in between the suppliers and Apple. Had the suppliers been informed appropriately before they were handed over with the proj ect, the supplier could have delivered the demanded order on time. The incident did also reveal that Apple had lacked the utilization of effective technologies. An effective use of information communication and technology (ICT) could have communicated things appropriately to the supplier. Nevertheless, since then, Apple has constantly struggled to match the post-launch hype of a specific product (Lockamy III 2017). The incident has also highlighted the Apples incapability to make an effective forecast of demand. Their customers have always required products in huge numbers post the launch of a new iPhone. However, customers requirements had not been fulfilled. They have shown enough of patience by being on cue for their favourite brand; however, many of them had struggled to get that. This is both communication-related gap and also the technological glitch which have not allowed Apple satisfying the needs of customers (Chin, Tat and Sulaiman 2015). Conclusion: To conclude, physical logistics network and supporting information systems are two very critical factors in logistics and supply chain operation. The fact has been proved valid in the light of literature review on the chosen topic and the case study on Apple. The use of physical network and the ICT are two useful factors which do not only help to make effective demand forecast but, also helps to maintain a good relationship with suppliers. Apple as according to the case study has continually struggled to satisfy the needs of customers. It is due to the shortcomings in ICT application that ruined the company to establish an effective communication with the supplier. In addition to this, Apple had at that time believed in hiding the real content of projects until those were being confirmed from the suppliers end. Such strategy does not just reveal the communication gap but also their incapability to identify the suppliers potentiality. References: Alftan, A., Kaipia, R., Loikkanen, L. and Spens, K., 2015. Centralised grocery supply chain planning: improved exception management.International Journal of Physical Distribution Logistics Management,45(3), pp.237-259. Beske-Janssen, P., Johnson, M.P. and Schaltegger, S., 2015. 20 years of performance measurement in sustainable supply chain managementwhat has been achieved?.Supply chain management: An international Journal,20(6), pp.664-680. Brandenburg, M., Govindan, K., Sarkis, J. and Seuring, S., 2014. Quantitative models for sustainable supply chain management: Developments and directions.European Journal of Operational Research,233(2), pp.299-312. Chin, T.A., Tat, H.H. and Sulaiman, Z., 2015. Green supply chain management, environmental collaboration and sustainability performance.Procedia CIRP,26, pp.695-699. Govindan, K., Soleimani, H. and Kannan, D., 2015. Reverse logistics and closed-loop supply chain: A comprehensive review to explore the future.European Journal of Operational Research,240(3), pp.603-626. Hsu, C.C., Tan, K.C. and Mohamad Zailani, S.H., 2016. Strategic orientations, sustainable supply chain initiatives, and reverse logistics: Empirical evidence from an emerging market.International Journal of Operations Production Management,36(1), pp.86-110. Jothimani, D. and Sarmah, S.P., 2014. Supply chain performance measurement for third party logistics.Benchmarking: An International Journal,21(6), pp.944-963. Khan, U.A., Alam, M.N. and Alam, S., 2015. A critical analysis of internal and external environment of Apple Inc.International Journal of Economics, Commerce and Management,3(6), pp.955-961. Lockamy III, A., 2017, July. 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