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SUBMITTED TO : MR. AYUSH MEHROTRA
SUPPLY CHAIN MANAGEMENTON
SUBMITTED BY: ANIL BHARTI
APPLE Inc.o Founded April 1, 1976 by Steve Jobs, Steve Wozniak,
Ronald Wayneo 394 retail storeso Worldwide operationso Electronic devices with own software and hardwareo Famous for: iMac, MacBook, iPhone and iPado Biggest company on the world based on market
capitalization
Supply Chain Planning at Apple Inc.
Apple's supply chain judged best in world again
o A report by AMR Research has named Apple as the company with best supply chain practices in the world for the third year running.
o In a feature exploring the secret behind Apple’s success, it was found that company’s ability to bring together two sides of the supply chain (digital and physical) efficiently and at increasingly low cost.
Digital supply chain• It is 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 destination (consumer).
The main processes of a digital supply chain are as follows:
• True on-demand product availability
• Ease of use and speed for content search and activation.
• Pricing and subscriptions
• Quality management built on licensing and refunds
SUPPLY CHAIN MANAGEMENT…?
Procurement Manufacturing Distribution
Managing flow of... ... in both directions
Supply chain management (SCM) is the management of the flow of goods and services. It includes the movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption.
APPLE’S SUPPLY CHAIN MANAGEMENT
Customer comes first ,cost cutting comes second Set impossible target Prioritize action Adopt process view Simplify product and process Make radical changes when necessary Enhance relationship
SCM Goalo Increasing effectiveness and efficiency operational excellenceo Decrease operational costso Communication and relationships in a network of companies
Importance and valueCompanies like Apple:o Highly innovativeo Short product life cycle
continuous improvemento High number of competitorso Limited number of supplierso Investments neededo Trade secretso Worldwide operationso Decreasing margins
Operational Excellence as competitive advantageo High control over costs and
informationo Speed product time to
marketo Delivery based on demando Increased sales and marginso High qualityo Reduce inventory levels
Material Suppliers of iPhoneo Samsung: The Singapore facility manufactures CPU and Video
processing chips.o Infineon: The Singapore facility manufactures Baseband
Communications hardware.o Primax Electronics: The Taiwan facility manufactures Digital
Camera Modules.o Foxconn International: The Taiwan facility manufactures internal
circuitry.o Entery Industrial: The Taiwan facility manufactures connectors.o Cambridge Silicon: The Taiwan facility manufactures bluetooth
chipsets.o Unicorn Technology: The Taiwan facility manufactures printed
circuit boards.
o Catcher Technology: The Taiwan facility manufactures stainless metal casings.
o Broadcomm: The U.S. based facility builds touch screen controllers.
o Marvell: The U.S. based facility builds 802.11 specific parts.
o China facility assembles the hardware, holds inventory, and handles the pick, pack, and ship steps of the fulfillment process.
o The iconic iPod and iPhone maker took the top spot due to "an intoxicating mix of brilliant industrial design, software interfaces and consumable goods that are purely digital”.
Benefits Apple got from its Supply Chain
Cost : Reduced inventories Reduced waste Reduced total manufacturing costs
Service: Establishment of a collaborative framework Near real time information flow
Example of Apples success related to SCMo Design requirements: Light shining through aluminum, holes
invisible to human eye cut with hoard laserso Exclusive contract with laser manufacturer (impact on
competitors supply chains)o Long-term commitment, dependability of supplier on Appleo High volume, pressure on prices, negotiation high margins
Contracts earlier in
time
Monitoring and control
Quick adaptions No delays Lesser
sales loss
CHALLENGES FACED BY APPLE Inc.• Rapidly changing Technology market.• Decreasing market share• Global Supply Management• Governance issues related to different suppliers and different countries.• Increasing demand/waiting times resulting in unsatisfied customers. • Fluctuating world economics• Too many eggs in one basket – Suppliers• Manufacturing Complexities causing disruptions in Supply Chain.• High logistics cost with only 1 warehouse – 1 Assembling country – higher lead
times.• Increasing labor issues in Chinese assembling plants.
How does Apple run its supply chain operations?
• In a nutshell, Apple purchases components and materials from various suppliers, then gets them shipped to the assembling plant in China.
• From there, products are shipped directly to consumers (via UPS/FedEx) who bought from Apple's Online Store.
• For other distribution channels such as retail stores and other distributors, Apple keeps products at Elk Grove, California (where central warehouse and call centre are located) 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.
SCM MODEL OF APPLE Inc.
THANK YOU…