Apple Global Supply Chain

Topics: Supply chain management, Supply chain, Inventory Pages: 15 (419 words) Published: December 2, 2014
Apple Global Supply Chain
Hang Pan

Agenda





Company Profile
Global Supply Chain Management
Challenges and solutions
Conclusions

Apple profile









Founded on April 1,1976 by Steve Jobs, Ste
ve Wozniak , Ronald Wayne
Headquarter : Cupertino, California
394 retailed stores worldwide
Produc
ts
Hardware: iMac,MacBook, iPhone, iPod, iPa
d
Software: Mac Os X,iTunes, Internet brower
s,…..

New product development process

The whole development process is in USA.

Global supply chain

Designed in California, assembled in

•156 key suppliers

Example: Some suppliers of an iPho
ne
(South Korea):CPU+Video chips
(Germany):Baseband
(Japan):front and rear cameras
(Japan):Screens
(South Korea): Display panels
(Taiwan):Bluetooth
(Taiwan):Touch ID Sensors and fingerprint techn

1.
2.
3.
4.
5.
6.
7.

ology
8.
9.
10.
11.

(Taiwan):Casings
(USA):Touch Screen Controls
(USA): Specific Parts
(China):Assembling+Inventory

How Apple ships millions of iPhones for simultaneous delivery











Limited launch quantity
Security measures:guards,plain boxes, tomato boxe
s
Apple sends new orders to assembling factories ba
sed on real-time product demand.
Apple makes constant adjustments to iPhone shipm
ents, e.g.: iPhones are directly shipped to distributi
on centers in Europe to fill a bump.
Outsouced logistics service:UPS,FedEx
Modes of transportation : airplane , truck

Apple’s inventory management




Inventory turnover :how many times a company’
s inventory can be sold and replaced over a specifi
c time period (so the higher the number the better)

Apple has extremely good performance in inventory manage
ment.

Benefits Apple gets from its SCM








Cost
:

Reduced inventories
Reduced waste
Reduced total manufacturing cost
Servic
e:

Establishment of a collaboration framework
Near real time information flow

Challenges?











Some components are currently obtained from the
single or limited sources.
Quality control
Logistical services are provided by outsourcing part
ners
Natural and man-made disasters : e.g. storms , stri
ke
Profits may drop due to higher employee costs in C
hina
Public-relations disaster : e.g.:labor abuse, underag
e workers,employee mistreatment, workers’suicide

Possible solutions?










Alternative suppliers or outsourcing partners : key
components and assembling do not reply on simp
le supplier
Effective communication and access to informatio
n
Exert more controls, keep track of all operations t
o ensure optimal performance
Squeeze suppliers less,supervise suppliers to ens
ure no labor abuse
Transfer assembling plant to Vietnam………

Conclusions








Designation,research&development in USA, comp
onents sourced from 156 key suppliers,assembled
in China.
Good performance in inventory management.
Outsource logitical service
Modes of transportation: airplanes,trucks
High risk supply chain
Apple’s key to success : not only innovative techn
ology,but also competent supply chain managem
ent.

Any questions?

Thanks for your attention

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