Apple: A Case of Three Supplier Hubs
Group 3 MBA-Tech IT Bhaskar Jain-105 Abhimanyu Maheshwari-109 Prannoy Pillai-114 Pranjal Saiwal-115
1. What strategy is Apple pursuing to remain competitive? What role does Apple's materials management organization play in making Apple successful? What performance measures should Apple use with respect to materials management? Apple focuses on two strategies – R&D investment to generate a steady stream of product introductions & Cost reduction to maintain or improve margins while reducing prices. Apple’s Material Management Organization contributed towards its success by continuously trying to reduce inventory costs, thus, helping it reach the cost reduction goal. Performance measures of Materials Management: Accuracy of forecasts, Availability of right parts in right quantities at right time and cost. 2. Analyze the hub process at Fountain, Colorado a. What changes were made as part of the hub implementation? The changes that were made as part of hub implementation were the following: Raw material was stored outside of Apple’s site Logistics handling was the responsibility of Fritz The supplier and not Apple owned raw material stored at the hub b. What role does Fritz play in the hub? Fritz coordinated materials flow and information flow and acted as customs broker. Transportation from the supplier to the hub and from the hub to Apple’s site was the responsibility of Fritz. c. Could Apple have made any of these changes without implementing a supplier hub? What alternative solutions could have been implemented? The main issue to be resolved for Apple was the clearing of space utilized by storage on-site to free up space to ramp up production. This issue could also have been resolved by the implementation of the following: i. Establishing a company-managed warehouse near the site ii. Contracting for warehousing with a logistics company iii. Having suppliers establish a local source of supply and thus supplying using a...
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