Operationsmanagement and supply chain methodology
Businessesare operating in a dynamic, turbulent economic environment hencerequiring them to develop appropriate strategies for their survival.This involves identifying the most efficient and effective practicesand procedures for development and manufacture of products and theireventual delivery to customers. For instance, Gunasekaran, Lai andCheng (550) assert that enhancement of internal efficiencies of acompany is not sufficient enough for the company’s survivaladeptness should be introduced to such company’s supply chain.Increasing globalization and competition among companies operating atlocal as well as international markets present challenges such asconvenient delivery of products to customers at the right place andtime hence challenges in effectively managing supply chains (Soon andUdin 512). Frequent adjustments in production and products’ shortlife-cycles witnessed in industries such as electronic may resultinto production schedule restlessness that in turn disturbs supplychains (Pujawan 94) hence the need for proper management. Therefore,operations and supply chain management is key for business’competitive advantage and survival. This paper investigates Apple’soperations management and supply chain methodology to establish howthey have granted the company a sustained competitive advantagewithin the electronic industry, not only in one country but acrossthe globe.
Thefame of Apple Company goes back to the blossoming of personalcomputer industry during the 20thcentury when it introduced the McIntosh in 1984 portraying it as aninnovative company. Despite being pummeled by poor decision-making in1990s, the company perked up and now radiates the enviable attributesin the current century that propelled it to fame at infancy. Thecompany develops, manufacture and market electronic products such ascomputers and phones and related software and peripherals that areunique from competitors’ products. It is considered among theleading companies in the electronic industry. It was established in1976 by two college dropouts- Steve Jobs and Steve Wozniak.
Thecompany enjoyed market share and sales growth prompting it to gopublic in 1980. However, it started experiencing problems afterwardscontributing to the laying of employees in 1981 and being overtakenas the major supplier of personal computers across Europe by IBM.With increasing competition in the industry, the problems to thecompany increased, for instance the $150 million lawsuit it won overXerox Corporation in 1989 and the lawsuits it lost against HP andMicrosoft in 1990. The management decision to retrench approximately10% of the workforce and charge lower prices for the company’sproducts further crippled it. Fortunately, Jobs came up withrestorative measures and reduced product lines from 19 to fourbearing fruits through introduction of iMAC that restored the companyback to its initial status currently it is famed for manufacturingof electronics such smart phones and laptops.
Supplychain methodology and Operations management
Supplychain is described as an integrated process wherein a number ofbusiness bodies such as manufacturers, suppliers and distributorscollectively work together for procurement of inputs, manufacture ofproducts and delivery of manufactured products to customers. Itencompasses information exchange and movement of products frommanufacturing point to the consumption point (Zhou and Benton 1349).Services, materials and information are managed to successfully meetthe needs of customers. Information about customers’ preferencesand tastes is collected to enable in development of customer-tailoredproducts then raw materials of appropriate quality are procured forthe manufacture of developed products. Finally, the manufacturedproducts are distributed and delivered to customers in the mostconvenient ways.
Appleinvests heavily in research and development (R&D) enabling it tobest understand market trends- the shift in customers’ preferencesand tastes. Basing on its customer-oriented philosophy, the companyutilizes the acquired R&D information to manufacture productswith unique features that optimally satisfy customers’ needs andwants. More so, it has a range of products that target and correspondto the diverse needs of customers, for instance, laptops that can becarried from one place to another hence suiting students and personalcomputers occupying lesser space for office purposes. The companycarries out R&D activities on a continual basis granting anadvantage of introducing new product models as and when deemedappropriate. Such a relative long product life cycle affords thecompany sufficient time to develop and introduce new products ontime.
Despiteembracing product diversity, Jobs introduced fewer product categorieson his return, only four- portable, consumer, desktop and pro. Such amove significantly reduced supply chain’s complexity the workforcehad fewer areas to concentrate on unlike in supply chains having manycategories hence more areas of focus. Accompanied by the principle“simplicity is the ultimate sophistication,” fewer productcategories facilitate the workforce to prioritize their actionswithout difficulties. In this way, optimal support to the strategybeing implemented is attained. The attained optimal support grantsthe company competitive advantage over competitors having moreproduct categories.
Anotherfeature of Apple’s supply chain that grants it competitiveadvantage is the healthy relationships with suppliers and customers.Apple integrates suppliers in product development, maintains closecommunication and relationship with suppliers and performs supplierevaluations. These practices enable them to identify, secure andsustain competent suppliers such as Foxconn that provide quality rawmaterials on favorable terms and conditions without delayscontributing to smooth operations. On the other hand, the company hasstrong customer care department in its stores across the globe aswell as online that conveniently interacts with customers addressingtheir issues/complains (Apple(a)). Such services enhance customersatisfaction that in turn leads to customer loyalty and increasedsales.
InUnited States of America, a big portion of logistics costs is made upof transportation costs. Apple Company have found a way around thischallenge through prudent structure of its supply chain it hasestablished only one warehouse in California and synchronized itthrough automation to its customers and around 246 stores across theregion (Apple(a)). This move significantly reduced logistics costsfor the company compared to its competitors. Equally, running its ownstores and a few appointed distributors helps the company predict andestimate demand easily and use such figures for making productionadjustments. This also, helps the company to provide high qualitycustomer service as the employees and appointed distributors havemeticulous knowledge about the products.
However,it is worth noting that Apple’s operations management and supplychain have some drawbacks despite the above discussed merits-overreliance on one region and poor working conditions. Shenzhen,China hosts most of the company’s assembly factories whereasNorthern Taiwan is the main source of the company’s customizedcomponents hence posing a high risk to its procurement and operationsbecause catastrophes to these two regions will cripple the company’soperations. The company’s labor policy explained by the report onsupplier responsibility specifies maximum work duration of 60 hourswith a minimum one-day off per week for every worker (Apple(b) 11).However, this policy is not adhered to as approximately 50% ofworkers to their suppliers go beyond the maximum 60-hour workingduration for instance, some media outlets have reported thesituation at Foxconn being worse- resulting into labor strife,suicides and accidents (Moren). Such working conditions defy ethicsand corporate social responsibility practices from Apple Company thatis the company attains its competitive advantage at the expense ofthe workers and the general community at large.
Businessesoperate in a dynamic, turbulent economic environment that requiresrigorous strategies to improve their success and survival otherwiserisk failure. Such rigorous tactics should be broad they should notonly address the internal operations of the business implementingthem, but also address the external operations. They should addressthe processes and practices involved along the business’ supplychain that is from procurement of raw materials through productdevelopment and manufacturing to distribution and delivery of theproduct to the customers. Competitive advantage ought to be attainedat every stage.
First,research and development investment is crucial to such strategies asit enables the business to identify the needs to be met, designproducts with features and qualities matching the needs and identifyand procure most suitable raw materials. These considerations requiremutual interaction between the business and the suppliers andcustomers. Such interaction help the business identify reliablesupplier or suppliers having high-quality raw materials for smoothoperations. Also, it helps the business decide the best way todistribute its products to reach customers at the right place andright time. Therefore, despite the Apple’s operations managementand supply chain’s limitations, it has afforded the companycompetitive advantage in the electronic industry.
Apple(a).Apple retail stores, United states, 2014. Accessed fromhttp://www.apple.com/retail/storelist/.
Apple(b).Supplier responsibility 2014 progress report, 2014. Accessed fromhttp://images.apple.com/supplierresponsibility/pdf/Apple_SR_2014_Progress_Report.pdf.
Gunasekaran,Angappa, Lai, Kee-hung, and Cheng, Edwin T. C. responsive supplychain: A competitive strategy in a networked economy. Omega 36(4),2008, 549-64.
Moren,Dan (2014). Apple’s 2014 supplier report: Better workingconditions, fewer conflict minerals. Accessed fromhttp://www.macworld.com/article/2097723/apples-2014- supplier-report-better-working-conditions-fewer-conflict-minerals.html.
Pujawan,Nyoman I. Schedule nervousness in a manufacturing system: a casestudy. Management of Operations 15(5), (2004), 515-24.
Soon,Quah H., and Udin, Zulkifli M. supply chain management from theperspective of value chain flexibility: An exploratory study.Journal of Manufacturing Technology Management, 22(4), (2011),506-26.