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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