WEBVTT

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SPEAKER: Alex is a
major tech enthusiast.

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Recently, he attended a
virtual Apple launch event,

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where he witnessed
the capabilities

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of all new iPhone 13 series.

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Instantly, he made the decision
to get an iPhone 13 Pro.

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However, he missed the
pre-booking deadline,

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and he's been waiting
for this phone

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to hit the e-commerce
sites ever since.

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After waiting for a long time,
he visited the offline Apple

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Store, where the store
representative informed him

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about an ongoing delay in the
production of iPhone 13 Pro due

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to the supply
chain inefficiency.

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Alex then went to
a couple of more

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trusted Apple reseller outlets
and received the same response.

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He then became intrigued
about this term supply chain

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and how it affects the
production of a big corporation

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like Apple Inc. Therefore, he
began exploring this topic.

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He spoke with his friend
Rachel, who works at Apple Inc

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to learn about supply
chain management

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and how the chain is disrupted
due to international chip

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shortage.

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Rachel explained to him
about supply chain management

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using Apple Inc's example.

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She said if you order an
iPhone from the Apple Store,

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you'll notice that Apple
is not precisely delivering

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the product on its own.

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All the iPhones
available on Apple Store

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are majorly manufactured
at the Shenzhen assembly

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plant in China.

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But before that, raw
material suppliers

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from all around
the world deliver

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goods needed to manufacture an
iPhone to this assembly site.

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And once the product
is assembled,

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it gets shipped to
the storage warehouse

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and then to your doorstep
by third party vendors

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like FedEx or UPS.

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This means entities such as raw
material supplier, manufacturer,

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and third party
logistics vendor are

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in consistent communication
with each other

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until the iPhone reaches you.

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These entities and
their communication

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involved in product
manufacturing

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to product delivery
is collectively

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considered as a supply chain.

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After listening to
this, Alex asked Rachel

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how Apple Inc has
implemented this supply chain

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and how can one design
a sleek strategy

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to manage a supply chain
that is not overly influenced

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by external factors.

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In response, Rachel
explained, well, there

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are five stages for building
supply chain management,

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and Apple has adopted these
stages while building the supply

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chain management strategy.

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The first stage of
building a supply chain

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is planning an
operational strategy.

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Apple, since its inception,
has had a clear goal.

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To provide the best personal
computing devices to consumers.

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The initiative of Apple to
scrutinize each app or program

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before launching it
on the Apple App Store

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makes all Apple
devices more secure.

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These pre-planned
actions or strategies

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had been the most vital
USPs of this organization.

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The next stage is sourcing.

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In this stage, Apple acquires
equipment and materials

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from suppliers and
then ships them

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to the offshore assembly
factory in China.

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The 120 hertz screens are
exported from Samsung's Asan

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plant.

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Foxconn ships batteries,
and the processing chips

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are manufactured and
exported by TSMC.

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Then comes the third
stage, known as Making.

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This is the stage where Apple
manufactures its products.

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The outsourced
Chinese assembly plant

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majorly assembles all Apple
products and ships them

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to the warehouses or
distribution centers

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spread across
multiple continents.

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After that, the next stage
of supply chain management,

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delivery, comes into play.

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Here, the products
ordered online

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get shipped to the
doorstep of consumers

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from storage warehouses,
whereas the distribution

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centers, on the other
hand, send items

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to retail stores
for offline sales.

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This whole shipping
process is carried out

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by third party logistics
vendors, such as FedEx.

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Supply chain management's last
building stage is returns.

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Here, the faulty or damaged
products during delivery

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get shipped back to
the storage warehouses

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and then the assembly
plant for refurbishment.

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Statistically speaking,
97% of Apple's supply chain

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is all about outsourcing
agreements and collaborations,

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which has helped Apple become
the best computing device

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producer.

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However, due to the recent
worldwide chip shortage,

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Apple's supply chain has
been affected adversely.

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The world was shut down because
of the COVID-19 pandemic,

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and many factories
also went down with it,

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leaving chip
manufacturing materials

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unavailable for months.

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Increased consumer
electronic demand

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in recent times and scarcity
of semiconductor supplies

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has put pressure on
Apple supply chain,

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prompting the company to halt
production of 10 million iPhone

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13 devices.

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After listening to
Rachel, Alex learned

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why there is a constant delay
in the delivery of iPhones

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and became more patient about
his desire to buy an iPhone.

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On that note, here's
a question for you.

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From the given
options, which option

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does not fall under the stages
of supply chain management?

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A, planning
operational strategy.

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B, sourcing.

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C, making.

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D, disposal.

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Do give it a thought
and leave your answers

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in the comment section below.

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Three lucky winners will
receive Amazon gift vouchers.

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With the help of an
Apple Inc case study,

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we explored how a
supply chain management

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strategy can be established.

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This domain of
business management

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is crucial for any product
or service-based company

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in the long run.

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A well-managed supply chain
can lower operational expenses,

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allowing a firm to
gain more profit.

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It can also improve corporate
brand recognition and customer

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service.

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Hence, companies invest a great
deal in their supply chain.

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They constantly hire
professional supply chain

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management experts.

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These professionals are tasked
with managing logistics,

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updating the
company's inventory,

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and conducting a thorough
evaluation of the manufacturing

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cycle to discover
and correct flaws.

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That is the reason why
these SCM professionals

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are compensated really well.

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According to Payscale, the
average salary for supply chain

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managers is $84,000 per annum.

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Whereas in India, the
average annual salary

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is around 8.5 lakhs per annum.

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We hope you enjoyed this video.

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If you did, a thumbs up
would be really appreciated.

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