SPEAKER: Alex is a
major tech enthusiast.
Recently, he attended a
virtual Apple launch event,
where he witnessed
the capabilities
of all new iPhone 13 series.
Instantly, he made the decision
to get an iPhone 13 Pro.
However, he missed the
pre-booking deadline,
and he's been waiting
for this phone
to hit the e-commerce
sites ever since.
After waiting for a long time,
he visited the offline Apple
Store, where the store
representative informed him
about an ongoing delay in the
production of iPhone 13 Pro due
to the supply
chain inefficiency.
Alex then went to
a couple of more
trusted Apple reseller outlets
and received the same response.
He then became intrigued
about this term supply chain
and how it affects the
production of a big corporation
like Apple Inc. Therefore, he
began exploring this topic.
He spoke with his friend
Rachel, who works at Apple Inc
to learn about supply
chain management
and how the chain is disrupted
due to international chip
shortage.
Rachel explained to him
about supply chain management
using Apple Inc's example.
She said if you order an
iPhone from the Apple Store,
you'll notice that Apple
is not precisely delivering
the product on its own.
All the iPhones
available on Apple Store
are majorly manufactured
at the Shenzhen assembly
plant in China.
But before that, raw
material suppliers
from all around
the world deliver
goods needed to manufacture an
iPhone to this assembly site.
And once the product
is assembled,
it gets shipped to
the storage warehouse
and then to your doorstep
by third party vendors
like FedEx or UPS.
This means entities such as raw
material supplier, manufacturer,
and third party
logistics vendor are
in consistent communication
with each other
until the iPhone reaches you.
These entities and
their communication
involved in product
manufacturing
to product delivery
is collectively
considered as a supply chain.
After listening to
this, Alex asked Rachel
how Apple Inc has
implemented this supply chain
and how can one design
a sleek strategy
to manage a supply chain
that is not overly influenced
by external factors.
In response, Rachel
explained, well, there
are five stages for building
supply chain management,
and Apple has adopted these
stages while building the supply
chain management strategy.
The first stage of
building a supply chain
is planning an
operational strategy.
Apple, since its inception,
has had a clear goal.
To provide the best personal
computing devices to consumers.
The initiative of Apple to
scrutinize each app or program
before launching it
on the Apple App Store
makes all Apple
devices more secure.
These pre-planned
actions or strategies
had been the most vital
USPs of this organization.
The next stage is sourcing.
In this stage, Apple acquires
equipment and materials
from suppliers and
then ships them
to the offshore assembly
factory in China.
The 120 hertz screens are
exported from Samsung's Asan
plant.
Foxconn ships batteries,
and the processing chips
are manufactured and
exported by TSMC.
Then comes the third
stage, known as Making.
This is the stage where Apple
manufactures its products.
The outsourced
Chinese assembly plant
majorly assembles all Apple
products and ships them
to the warehouses or
distribution centers
spread across
multiple continents.
After that, the next stage
of supply chain management,
delivery, comes into play.
Here, the products
ordered online
get shipped to the
doorstep of consumers
from storage warehouses,
whereas the distribution
centers, on the other
hand, send items
to retail stores
for offline sales.
This whole shipping
process is carried out
by third party logistics
vendors, such as FedEx.
Supply chain management's last
building stage is returns.
Here, the faulty or damaged
products during delivery
get shipped back to
the storage warehouses
and then the assembly
plant for refurbishment.
Statistically speaking,
97% of Apple's supply chain
is all about outsourcing
agreements and collaborations,
which has helped Apple become
the best computing device
producer.
However, due to the recent
worldwide chip shortage,
Apple's supply chain has
been affected adversely.
The world was shut down because
of the COVID-19 pandemic,
and many factories
also went down with it,
leaving chip
manufacturing materials
unavailable for months.
Increased consumer
electronic demand
in recent times and scarcity
of semiconductor supplies
has put pressure on
Apple supply chain,
prompting the company to halt
production of 10 million iPhone
13 devices.
After listening to
Rachel, Alex learned
why there is a constant delay
in the delivery of iPhones
and became more patient about
his desire to buy an iPhone.
On that note, here's
a question for you.
From the given
options, which option
does not fall under the stages
of supply chain management?
A, planning
operational strategy.
B, sourcing.
C, making.
D, disposal.
Do give it a thought
and leave your answers
in the comment section below.
Three lucky winners will
receive Amazon gift vouchers.
With the help of an
Apple Inc case study,
we explored how a
supply chain management
strategy can be established.
This domain of
business management
is crucial for any product
or service-based company
in the long run.
A well-managed supply chain
can lower operational expenses,
allowing a firm to
gain more profit.
It can also improve corporate
brand recognition and customer
service.
Hence, companies invest a great
deal in their supply chain.
They constantly hire
professional supply chain
management experts.
These professionals are tasked
with managing logistics,
updating the
company's inventory,
and conducting a thorough
evaluation of the manufacturing
cycle to discover
and correct flaws.
That is the reason why
these SCM professionals
are compensated really well.
According to Payscale, the
average salary for supply chain
managers is $84,000 per annum.
Whereas in India, the
average annual salary
is around 8.5 lakhs per annum.
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