apple – supply c hain m anagement
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Apple – Supply C hain M anagement. Aurora shele Sun di jaeyeon lee. Apple overview. Apple Inc. was founded by Steve Jobs and Steve Wozniak in 1976. Apple Computer, Inc., is an American multinational corporation with a focus on - PowerPoint PPT PresentationTRANSCRIPT
Apple – Supply Chain Man-agement
Aurora sheleSun di
jaeyeon lee
2
Apple overview
■ Apple Inc. was founded by Steve Jobs and Steve Wozniak in 1976.
■ Apple Computer, Inc., is an American multinational corporation with a focus on designing and manufacturing consumer electronics and closely related software products
■ As of September 2007, the company operates 194 retail stores in the United States, and more in the United Kingdom, Japan, Canada, and Italy
■ For a variety of reasons, ranging from its philosophy of comprehensive aesthetic design to their advertising campaigns, Apple has engendered a distinct reputation in the consumer electronics industry and has cultivated a customer base that is unusually devoted to the company and its brand
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Problems in the supply chain
■ Delays in production, distribution etc.
■ Expensive inventories
■ Lack of partners’ coordination
■ Uncertainties in deliveries
■ Poor demand forecast
■ Interference with production
■ Poor quality
Supplier of materialsSupplier of services
Tier 1
Tier 3
Tier 2
Legend
Customer Customer Customer Customer
Distribution center
Distribution center
Manufacturer
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Supply Chain Management
Supply Chain Mgmt
Supply Chain
Strategy
Logistics Mgmt
Procure-ment
Information Mgmt
Supply Chain Plan-
ning
Assets Mgmt
Suppliers
Manufacturers
Warehouses
Stores
Customers
■ Main components
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Apple’s problems in Supply Chain Management
■ The outsourcing and offshoring of manufacturing to emerging and developing countries has resulted in challenges– environmental and – social standards in these countries– direct reputational and financial impacts
■ The biggest supply chain challenge is volatility caused by increased market dynamics related to demand. This requires – advanced planning capabilities– early insights and guidance on effective responses – that maximize the profitability of a company’s portfolio
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Apple’s supply chain judged best in world again
■ Best supply chain practices– A report by AMR Research has named Apple as the company with best supply chain practices in the world
■ Apple beats competitors at inventory turn over
Company Days of inventoryApple 5 daysDell 7 daysLenovo 15 daysHP 32 daysIntel 89 daysD-Link 131 days
Source: Gartner Inc.
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Apple’s Supply Chain secret?
■ Unified strategy– Every part of their business is aligned around that strategy.
■ Production– More than $80 billion in cash and investments.
■ Apple supplier’s life– Lucrative - high volumes– Painful - the strings attached.
■ Many key suppliers – They keep two weeks of inventory within a mile of Apple’s assembly plants in Asia.
■ Factories work overtime and they are being watched– To track efficiency and ensure pre-launch secrecy, Apple places electronic monitors in
some boxes of parts that allow observers in Cupertino to track them through Chinese factories, to discourage leaks.
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Technology in SC
■ The internet can be very effective communication enhancers
■ Software– Demand forecasting tools– Planning tools– Allow all SC members to coordinate their activities and adjust their production levels• Review past performance • Monitor current performance • Predict future production levels of products
■ The secret behind Apple’s success– Company’s ability to bring together two sides of the supply chain (digital and physical)
efficiently and at increasingly low cost
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Digital supply chain
■ Definition – A new media term that encompasses the process of the delivery of digital media, be it
music or video, by electronic means from the point of origin (content provider) to des-tination (consumer)
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Digital supply chain
■ Main processes– The main processes of a digital supply chain are as follows
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Bottom line
Apple plans to double spending on its supply chain, to $7.1 billion, continuing its focus on streamlining and controlling manufacturing.