SUBMITTED TO : MR. AYUSH MEHROTRA

SUPPLY CHAIN MANAGEMENTON

SUBMITTED BY: ANIL BHARTI

APPLE Inc.o Founded April 1, 1976 by Steve Jobs, Steve Wozniak,

Ronald Wayneo 394 retail storeso Worldwide operationso Electronic devices with own software and hardwareo Famous for: iMac, MacBook, iPhone and iPado Biggest company on the world based on market

capitalization

Supply Chain Planning at Apple Inc.

Apple's supply chain judged best in world again

o A report by AMR Research has named Apple as the company with best supply chain practices in the world for the third year running.

o In a feature exploring the secret behind Apple’s success, it was found that company’s ability to bring together two sides of the supply chain (digital and physical) efficiently and at increasingly low cost.

Digital supply chain• It is 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).

The main processes of a digital supply chain are as follows:

• True on-demand product availability

• Ease of use and speed for content search and activation.

• Pricing and subscriptions

• Quality management built on licensing and refunds

SUPPLY CHAIN MANAGEMENT…?

Procurement Manufacturing Distribution

Managing flow of... ... in both directions

Supply chain management (SCM) is the management of the flow of goods and services. It includes the movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption.

APPLE’S SUPPLY CHAIN MANAGEMENT

Customer comes first ,cost cutting comes second Set impossible target Prioritize action Adopt process view Simplify product and process Make radical changes when necessary Enhance relationship

SCM Goalo Increasing effectiveness and efficiency operational excellenceo Decrease operational costso Communication and relationships in a network of companies

Importance and valueCompanies like Apple:o Highly innovativeo Short product life cycle

continuous improvemento High number of competitorso Limited number of supplierso Investments neededo Trade secretso Worldwide operationso Decreasing margins

Operational Excellence as competitive advantageo High control over costs and

informationo Speed product time to

marketo Delivery based on demando Increased sales and marginso High qualityo Reduce inventory levels

Material Suppliers of iPhoneo Samsung: The Singapore facility manufactures CPU and Video

processing chips.o Infineon: The Singapore facility manufactures Baseband

Communications hardware.o Primax Electronics: The Taiwan facility manufactures Digital

Camera Modules.o Foxconn International: The Taiwan facility manufactures internal

circuitry.o Entery Industrial: The Taiwan facility manufactures connectors.o Cambridge Silicon: The Taiwan facility manufactures bluetooth

chipsets.o Unicorn Technology: The Taiwan facility manufactures printed

circuit boards.

o Catcher Technology: The Taiwan facility manufactures stainless metal casings.

o Broadcomm: The U.S. based facility builds touch screen controllers.

o Marvell: The U.S. based facility builds 802.11 specific parts.

o China facility assembles the hardware, holds inventory, and handles the pick, pack, and ship steps of the fulfillment process.

o The iconic iPod and iPhone maker took the top spot due to "an intoxicating mix of brilliant industrial design, software interfaces and consumable goods that are purely digital”.

Benefits Apple got from its Supply Chain

Cost : Reduced inventories Reduced waste Reduced total manufacturing costs

Service: Establishment of a collaborative framework Near real time information flow

Example of Apples success related to SCMo Design requirements: Light shining through aluminum, holes

invisible to human eye cut with hoard laserso Exclusive contract with laser manufacturer (impact on

competitors supply chains)o Long-term commitment, dependability of supplier on Appleo High volume, pressure on prices, negotiation high margins

Contracts earlier in 

time

Monitoring and control

Quick adaptions No delays Lesser 

sales loss

CHALLENGES FACED BY APPLE Inc.• Rapidly changing Technology market.• Decreasing market share• Global Supply Management• Governance issues related to different suppliers and different countries.• Increasing demand/waiting times resulting in unsatisfied customers. • Fluctuating world economics• Too many eggs in one basket – Suppliers• Manufacturing Complexities causing disruptions in Supply Chain.• High logistics cost with only 1 warehouse – 1 Assembling country – higher lead 

times.• Increasing labor issues in Chinese assembling plants.

How does Apple run its supply chain operations?

• In a nutshell, Apple purchases components and materials from various suppliers, then gets them shipped to the assembling plant in China. 

• From  there,  products  are  shipped  directly  to  consumers  (via UPS/FedEx) who bought from Apple's Online Store.

• For  other  distribution  channels  such  as  retail  stores  and  other distributors,  Apple  keeps  products  at  Elk  Grove,  California  (where central  warehouse  and  call  centre  are  located)  and  ships  products from there. 

• At  the  end  of  product's  life,  customer  can  send  products  back  to nearest Apple Stores or dedicated recycling facilities.

SCM MODEL OF APPLE Inc.

THANK YOU…