Apple – Supply C hain M anagement

1. Apple – Supply Chain Management Aurora shele Sun 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

3. Customer Customer Customer Customer Distribution center Distribution center Manufacturer Tier 1 Tier 2 Tier 3 Legend Supplier of services Supplier of materials 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

4. Supply Chain Management • Main components Suppliers Manufacturers Warehouses Stores Customers

5. Apple’sproblems 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

6. Apple’s supply chain judged best in world again Source: Gartner Inc. • 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

7. Apple’sSupply 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.

8. 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

9. 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 destination (consumer)

10. Digital supply chain • Main processes • The main processes of a digital supply chain are as follows

11. Bottom line  Apple plans to double spending on its supply chain, to $7.1 billion, continuing its focus on streamlining and controlling manufacturing.