Global Supply Chain Management

[Christos Papanagnou]

[Dilipsinh Jadeja] | [International Business] | @00509412]

 Contents

1. Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .03
2. Apple's Global Supply Chain. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.1 Characteristics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.2 Barriers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.3 Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Integration and Collaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Advance Technology used by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.0 Introduction:

It is nearly 30 years since the term "Supply Chain Management" first appeared. Since
then there has been a revolution has been in the way that organisations view their upstream supply process and their
downstream routes to marketplace. Still there are major gaps between the philosophy and the real scenario of supply
chain management but there is no doubt that it is an important essential in most companies today (Mangan et al.,
2002).

Global Supply Chain is a network which comprises a firm's relations with other
business units like raw material suppliers, financial, manufacturing faculty, sales and market, logistics and other units
which takes part in flow of materials. However, inputs can be in different modes like data or information, finances,
raw inventory and services regarding materials. Inputs in supply chain continuously flows around whole network in
forward and reverse flow from the original producer to final customer to increase profitability through efficiencies and
utmost the customer satisfaction.

This report contents how Gartner's top ranked supply chain since 2007 and tech giant
company Apple leads their sectors and build supply chains that are closely aligned with their business objectives.
 Apple's Global Supply Chain
Characteristics: -

One of the significant changes in Apple's supply chain management is to focus was
primarily on cost reduction and is now appear that, properly managed, these ideas, can deliver to enhanced consumer
delight.

(Source: - SlideShare)

There are two flows of Global supply chain. One is Information flow and other is
Material flow. Information flow comes from the customer to manufacturer and material flow goes from manufacturer
to customer. Apple works with its strategical global supply chain and its characterised as below-

1. Asset Management: -

Apple's essential character in global supply chain is the asset management. Tim
Cook's (Apple's CEO) doctrine was from the beginning is to slash inventory, decrease the number of warehouses and
let suppliers compete with each other. Thus, Apple's responsibilities towards production minimizes and it can
emphasis focus upon other flows of supply chain. In 2012, Apple Inc. was said to turn inventory every Five days, Half
of turnover in compare to other business organizations (Clara Lu,2013).

2. Information Management and Continuous Data Analysis: -

Data analysis is process which determines customers' response and suppliers' details.
Apple collects vast amount of information from 'end-to-end' sources and it helps company to its supply chain to meet
the customer's requirement and reduced the cost (Merc.e.u-tokyo.ac.jp, 2017).

1. Understanding demand and supply requirements.

2. Analyzing cost

3. Achieve operational excellence

4. Improving decision making

5. Forecasting chain supply

6.maintain sustainable inventory

3. Procurement: -

Procurement (Apple.com,2017) is the key aspect for each company to

represent itself in front of its suppliers, customers and stake holders. It's always been a mojo for Apple to
procure delight to customers and suppliers through its excellence. Apple' Inc stated in its website that the
goal is to obtain stellar products and services within short timeframes, at a reduced cost and in a way, that
values its customers and shareholders.

Apple being the largest producers of electronic gadgets has its flagship supplier
Foxconn, a Taiwanese company, is one of its strategic supply partners that churn out 10,000 of Apple's
products every day. It is very important that relationship is mutually beneficial. It is a fine example of
procurement playing a lead role in supply chains.
 4. Supply chain Planning: -

Supply chain planning contains all of the information regarding all departments,
flow of materials and data, research and analysis regarding the future, present and the past products,
analyzing cost and scopes of respective work-forces in supply chain of Apple.

It also concludes below components as well,

Customer Focus: -

Customer focus is the main character of supply chain and Apple invest more
time to provide customer-oriented product, gives after sale services and collect feedbacks. That is the reason
Apple has the most loyal customers in its market and vice versa.

Order Processing: -

Order processing shows how customers wants our products and how
company building the product. It is the method of making the product customer friendly with efficient time
and effort.

Sales Forecasting: -

Sales forecasting enables business organisation to interpret the demand and

which particular type of product customer wants. Unlike others, Apple launches its devices once in a year
for enabling company to find accuracy of customer's demand.
 5. Supply Chain Strategy: -

Supply chain strategy comprises the way of dealing the things, what would be the
company's approach in certain levels and building some criteria for being responsive against the undesirable situation.

6. Logistic management and reliable sources: -

Global supply chain can only complete after logistic management. It shows how
reliable suppliers company has and how company maintains the relationships with all of its transport and logistic
modes. Apple's key characteristics of supply chain is its trusted suppliers across the globe. Apple researches and
designs their product in USA but for resourcing it goes abroad in many countries and for that Apple has collaborated
with its trustworthy suppliers and uses prepaid facilities to negotiate raw materials, pricing terms, and guarantee high
volumes of production. It also helps Apple to maintain competitive market for its - competitors
(Aicd.companydirectors.com.au,2015).
 Barriers: -

Barriers in forms, not in levels: - There are many factors which reduces the Apple's global supply chain in
various forms. It can be distinguished in each level but as Apple is focusing on Designing and Developing product,
below barriers described in particular form which is affecting Apple's global supply chain.

Supplier's Risk: -

Suppliers' Risk is a major concern for Apple as it does not manufacture its own
products. Apple's key product iPhone, which is having more than a half of company's total revenue, manufactures in
China. This is big risk to rely upon other suppliers and also it resulted into overall performance of the Apple Inc.
(Slideshare.net, 2017).

Trends: -

Trends has a huge influence on every leading incorporations' supply chain and so it has
on Apple. New innovations lead to divert consumers and suppliers to other way.
 Competitiveness:

Apple is lone device maker of its own operating system and other major brands like Samsung,
Sony, Google and Nokia uses Android operating system. Its reasonable that Apple has its own monopoly in
products and designs with standard rate iOS products but customers also prefers cheap rate gadgets. That is the
reason competitors are battling it out in medium range gadgets

Geographical Environment: -

Every country is following its own traditions and for that particular reason
Apple needs to adapt countries' culture. One of the main service Apple provides in its product is Facetime
and its video calling facilities that allows apple users to do video calling but in UAE it is disabled.FaceTime
is a data-based service that would, the carriers argue, reduce their revenues. Both Du and Etisalat prohibit
users from calling via VoIP services such as viber and WhatsApp. This includes FaceTime which is disabled
on all iPhones bought in the UAE in the software itself. It reduces customer's interest for not availing all the
services.

Language Barrier: -

it is difficult to deal with different languages in different countries. Language barrier is

major issue to interact with the suppliers and customers and it affects all the companies for not responding in JIT
approach.
 Challenges: -

Sustainability: -

Sustainability means a supply chain who maintain the three key factors which is
Social, Environmental and Economical. Being a largest company on its sector, Apple has to focus these
factors for future generations and eco-friendly environment and also it has to maintain its economic value.

Transparency: -

Few supply chains are scrutinized quite like Apples. As the technology
obtained from some Asian suppliers, a new profession has emerged in a supply chain analyst, whereas
industry analysts of the past previous scoured quarterly earnings, now they delve deep into the opaque world
of supply chains (Forbes.com, 2017).
 Globalisation:

Globalization comprises change in politics, economics, social and technology

around the world. It does affect Apple Inc. and it is beyond its control to manage it but to adjust. There is no
doubt apple is globally accepted by their loyal customers but in some countries people prefers cheaper
products apart from standard and luxurious product. If US's relations with another county is not good then it
directly affects the demand of united state of America's products. Tax and Tariffs might be the challenge for
the company to deal with as varies country by country.

Competitors:

Competitors(slideshare.net,2015) might discover better supply chain than

Apple's. Japanese giant, Sony is a key competitor which is collaborated with Apple's key supplier, Foxconn
and competitors like Sony may be challenge for Apple. Other Information Technology giants like Google,
Samsung and Microsoft is top contender in customer's list apart from Apple's product. There is no other
different thing or technology which is in Apple's devices and not in competitors' devices. However, Apple's
competitors have low price gadgets than Apple's iPhones, MacBook and iPads.
3.0

INTEGRATION OF INTER
ORGANIZATIONAL RELATIONSHIPS
REINFORCEMENT: -

Definition of Supply Chain Integration(SCI): -

SCI is a term that concretize different communications channels and knots

with a supply networks. It is the alignment and interlinking of organisational process and it should not be
mystified with collaboration. Collaboration means a relationship between supply chain partners grown over
a business duration. Collaboration is not possible without integration but Integration is possible in the
absence of collaboration (Mangan et al., 2002).
 Internal integration: -

Above Graphs suggests (Merc.e.u-tokyo.ac.jp.,2015) how Apple take care of its privacy through highly
secured internal supply chain integration. It is customer-centred chain that inspects the market needs and
then further processes regarding product's designing.it also responds new customer's hidden demand and
requirements. planning is starts after researching the marketing, sales department and maintenance service
department's information. All of apple's departments are virtually integrated so perfect product will be the
outcome of its private process. After the visualization of design information, confirmed design has been
done and its ready for the external collaborative suppliers.

Internal integration processes of Apple enable:

(1) Frontend Development: - deriving product concept;

(2) Design information by Product Design visualizing;

(3) Design information by Procurement and Manufacturing through media choices;

(4) Design information through appealing customers by Sales and Marketing;

(5) maintenance activities managing design information as process routines and

(6) it also helps to supervise maintenance activities as routine process.

Apple internal integration supply chain then linked with external supply chain.
 Apple's Collaboration with Global Organisations: -

Sharing information beyond the firm's boundaries can be

critical. Therefore, it is very important for Apple Inc. to select their suppliers and business partners very
cautiously. It sounds strange but the fact is Apple does not acquire any manufacturing plants of iPhones in
its country of origin America. Apple outsources its product in China.Apple establish alliance with the global
electronics manufacturing services (EMS) leading firm, Foxconn.Apple Inc., which has maintained No.1
position in achieving supply chain effectiveness. It is the number one customer of Foxconn. Through
Foxconn's effective logistical configurations, Apple fascinated the worldwide customers by its innovative
products like iPhones and iPads. There are three main reasons behind this strategic alliance -
(Umguiangacollege.files.wordpress.com, 2017).

1.Cost - Apple avail cost advantage through minimising administrative, maintenance and inventory costs

2.Manufacturing - Apple can easily focus on demand fluctuations and changing their requirements through
setting aside production

3.Responsiveness -manufacturing locations are easy to reach their customers. Where EMS plays crucial part
for essential supply chain in emerging markets.
Multiple Global Suppliers: -

(Source: - Internet)

Apple secured its supply chain by making multiple alliances with each products'
components so if one supplier, by any means, stopped the production or the supplying of components
company can rely on the other one. Apart from competitiveness Apple managed to collaborate with other IT
organizations like Microsoft, Samsung, LG, Toshiba and Intel. Below tables shows how Apple collaborated
with its rivals and reinforced integrated global supply chain for components of iPad 2 (slideshare.net,2015)
4.0

Advanced Technology utilised by Apple within the sector to

maintain the its competitive advantage: -

Data Analytics:

Apple Inc., Being the most profitable technology company, found itself using
Big Data Analytics for staying the leading form the front. It helps Apple to produce systems that
customers would like to use. Apple and its competitors entered in the race with strong stride. Apple (Use
of Technology, 2017) already announced partnership with monitoring and sharing partners like IBM and
Beats. Which helps Apple to builds the Applications which provides health-related apps, air travels apps
and brings the analytical potentials to users of its devices in those fields.

Apple continuously tries to accelerate Data Analytics process in one way or another. Call it fancy, but
reason behind launching an Apple Watch seems to be designed for wearing gadgets all day long and collect
multiple data, with its sensors.
 Apple follows its traditional strength- product design and its unforthcoming part
is Big Data. With collective information, Apple determines that where, when and how iPhones, iPads,
MacBooks and now Apple Watches are used. Thus, Apple uses it in a fair way to increase customer
satisfactions and what users are expecting from the devices they are using (Use of Technology, 2017).

One of the most popular feature of Apple devices is Siri. It is just synonym of
Big Data Analytics as the voice captured by the device is uploaded to iClouds platforms and Apple stores
this data for two years and tagged it with unique anonymous indicator. analytics performer then compares
the captured voice with millions of other voices to recognize individual voice pattern to ensuring user
privacy.

Cloud Storage:

Apple (Use of Technology, 2017) also give users a specified iCloud storage for each device which enables
users to store data online for multipurpose use. This cloud-based storage helps Apple to build healthy
relationships with its customers. All that glitters are not gold, Apple dominated the music library by built
iTunes library to knows the listening taste of users but it asks for monetary subscriptions and even Apple
users preferred Google Music, Spotify which captures more market than Apple, as of now.

As an Information Technology giant, Apple, tends to use internet widely.

Whether it is supplier's network or customer's feedback platform, Apple use it all and its a lot of methods as
we can say 'internet of things' that connects Apple to its shareholders, customers and suppliers and still day
by day company growing its mode of connect to remains the most valuable for some time to come.
 Conclusion: -

Above report suggests how Apple see their supply chain as a vehicle for value-added delivery
and as a powerful tool for increasing competitive advantage in the market. Apparently storing computers is
like storing milk: you dont want it on the shelf in your warehouse for too long. Apple is very good at
essentially taking devices from factories and immediately selling them to customers. Future success of its
supply chain depends on how well they will manage relationship with suppliers and how far they go to
innovate its product and use its mojo to attract and satisfy the users. As of now Apple is leading the supply
chain market for almost a decade and it is dubbed as "King of Outsourcing". In the end it is all about
customer's value proposition and how Apple is achieving efficiently and profitably.
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