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    Apple's Supply-Chain Secret? Hoard Lasers

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    Birte Reiter
    Made and presented for the course Management Information Systems at Viadrina University, winter term 2012/2013.   1. What is Supply Chain Management about? What has to be managed? 2. Why is effective supply chain management (SCM) crucial for companies like Apple? Give examples for Apple’s successes related to effective SCM. 3. Analyze Apple’s supply chain management. How does the company use SCM to achieve operational excellence? Mention some interesting tricks used by Apple. 4. What other companies rely heavily on SCM? Give one concrete example.

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    Apple's Supply-Chain Secret? Hoard Lasers

    Uploaded by

    Birte Reiter
    474 views13 pages
    Made and presented for the course Management Information Systems at Viadrina University, winter term 2012/2013.   1. What is Supply Chain Management about? What has to be managed? 2. Why is effective supply chain management (SCM) crucial for companies like Apple? Give examples for Apple’s successes related to effective SCM. 3. Analyze Apple’s supply chain management. How does the company use SCM to achieve operational excellence? Mention some interesting tricks used by Apple. 4. What other companies rely heavily on SCM? Give one concrete example.

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    Made and presented for the course Management Information Systems at Viadrina University, winter term 2012/2013.   1. What is Supply Chain Management about? What has to be managed? 2. Why is effective supply chain management (SCM) crucial for companies like Apple? Give examples for Apple’s successes related to effective SCM. 3. Analyze Apple’s supply chain management. How does the company use SCM to achieve operational excellence? Mention some interesting tricks used by Apple. 4. What other companies rely heavily on SCM? Give one concrete example.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    474 views13 pages

    Apple's Supply-Chain Secret? Hoard Lasers

    Uploaded by

    Birte Reiter
    Made and presented for the course Management Information Systems at Viadrina University, winter term 2012/2013.   1. What is Supply Chain Management about? What has to be managed? 2. Why is effective supply chain management (SCM) crucial for companies like Apple? Give examples for Apple’s successes related to effective SCM. 3. Analyze Apple’s supply chain management. How does the company use SCM to achieve operational excellence? Mention some interesting tricks used by Apple. 4. What other companies rely heavily on SCM? Give one concrete example.

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    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
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    The passage discusses Apple's supply chain management strategies and how it achieves operational excellence through tight control and monitoring of its suppliers. It also mentions other companies like Toyota that rely heavily on effective supply chain management.

    Apple uses exclusive contracts with key suppliers, demands high volumes which allows it to negotiate high margins, commits to long-term relationships with dependable suppliers, and monitors suppliers closely through quality control and tracking efficiency to ensure quick adaptations and prevent delays.

    Factors driving Apple's effective SCM include its closed ecosystem, large discounts due to high volumes, willingness to spend on SCM, working closely with suppliers to optimize processes, focusing on a few product lines with little customization, and leveraging its large cash reserves in negotiations.

    Apples SC Secret?

    Hoard Lasers
    Management Information Systems 17.12.2012

    Outline
    1. What is SCM about? What has to be managed?

    2. Why is effective SCM crucial for companies like Apple?


    3. How does Apple use SCM to achieve operational excellence?

    4. What other companies rely heavily on SCM?

    Apple

    o Founded April 1, 1976 by Steve Jobs, Steve Wozniak, Ronald Wayne o 394 retail stores o Worldwide operations o Electronic devices with own software and hardware o Famous for: iMac, MacBook, iPhone and iPad o Biggest company on the world based on market capitalization

    Supply Chain Management

    Procurement

    Manufacturing

    Distribution

    Managing flow of...

    ... in both directions.

    SCM Goal

    Competitive advantage

    o Increasing effectiveness and efficiency operational excellence o Decrease operational costs o Communication and relationships in a network of companies

    Company

    Importance and value


    Companies like Apple: o Highly innovative o Short product life cycle continuous improvement o High number of competitors o Limited number of suppliers o Investments needed o Trade secrets o Worldwide operations o Decreasing margins Operational Excellence as competitive advantage o High control over costs and information o Speed product time to market o Delivery based on demand o Increased sales and margins o High quality o Reduce inventory levels

    Example of Apples success related to SCM


    o Design requirements: Light shining through aluminum, holes invisible to human eye cut with hoard lasers o Exclusive contract with laser manufacturer (impact on competitors supply chains) o Long-term commitment, dependability of supplier on Apple o High volume, pressure on prices, negotiation high margins

    Contracts earlier in time

    Monitoring and control

    Quick adaptions

    No delays

    Lesser sales loss

    Apples SCM
    They have taken operational excellence to a level never seen before.
    Driving factors of their effective SCM

    1. Closed ecosystem 2. Big discounts due to Apples volume 3. Mentality to spend exorbitantly

    Apples SCM
    4. Apple engineers work close with suppliers optimize industrial process 5. Focus on a few product lines do little in the way of customization 6. Big weapon - $80 Billion in cash and investment 7. Tough bargaining with suppliers o o o demands detailed price quote requires key suppliers to keep two weeks of inventory does not pay as long as 90 days after delivery

    Apples SCM
    8. Control reaches peak before announcement of new product o factories work overtime o surveillance to track efficieny / ensure pre-launce secrecy o every handoff point is monitored 9. Retail stores give it a final operational advantage o track demand by store / hour o extra spending to get around bottlenecks
    Enormous profits and margins due to their operational edge

    Tricks Apple uses


    o innovative production techniques

    o buy up all available air freight handicapped rivals

    o manufacturers are busy with Apple orders rivals like HTC fall behind

    o ship product in tomato boxes to avoid detection

    Toyota SCM at its highest point


    o Toyota Production System - pioneer of Just in time

    delivery o worlds top carmaker o hyper-efficient supply chain Well-intentioned BUT carries also unintended consequences be exposed to supply chain surprises can compromise quality e.g. Toyotas massive recall in 2009

    Thank you!

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