Business Logistics of the Apple Incorporation - Case Study Example

?Business Logistics Case Study: Apple Inc: The Apple Incorporation is restructuring the supply chain and the logistics management, with the aim of minimizing the logistic system, and in improving the speed delivery and the information relating to it. Apple Inc has collaborated with the Skyway Freight systems, for support in logistics and data management. The collaborative effort of the Apple and the Skyway is connected with for the supplying and delivering of products in various countries. The high tech global logistics and the supply chain in the Apple Inc are due to the integrated supply chain collaborations with the various leading Inc, which are flexible and good at building rapport with the rapid changing global market, and the user friendly nature of the internet and the electronic media. The launching of an extensive range of logistics inventiveness, intended to develop working efficiencies, increase service level and enhance profitability. The upcoming trends like the B2B integration, e-business, electronic procuring, and e-logistics are initiated in collaboration with trading partners, to increase efficiencies and eradicate the desecrate, out of supply chains. “The supply chain is corporate America’s last frontier. Conquering it is the key to reducing costs and maximizing profits. Damon Schechter and Gordon Sander have done a remarkable job in demonstrating the importance of supply chain management—to today’s business” (Delivering the Goods 2000). The Apple Inc, has implemented e-commerce to develop deep relationships on good rapport with their customers. Nearly 50% of Apple’s $32 billion in annual revenues are carried out over the network, and other manufacturer distributors and suppliers report quick rise in on-line sale. Apart from the U.S, the country Japan, too is emerging in e-commerce and is expected to achieve a growth of 40% in comparison to previous years. Process Flows Operation of Apple: Apple Inc, previously Apple Computer Inc, is one of the multinational companies in America that plans and sells customer electronics, software of computer, and personal computers. Logistic process of Apple Inc involve a large set of activities devoted to the transformation and allocation of commodities , from raw material sourcing to marketplace distribution, in addition to the associated flow of information. The application of process logistics facilitates a greater effectiveness of movements, with a suitable choice of methods, terminals, ways and scheduling. The implied intention of logistics is to create available merchandise, raw materials and possessions; satisfying four major requirements connected to order, release, quality and cost accomplishment. Logistics is therefore a multidimensional value added action, consisting of production, place, time and control of ingredients of the supply chain. Business nowadays is in a global atmosphere. This atmosphere forces companies, irrespective of place or primary marketplace base, to consider the other parts of the earth too, in their competitive policy analysis. Firms cannot separate themselves from or disregard external factors; for instance, fiscal trends, competitive circumstances or technology modernization in other nations. Some of their participants could be in competition or are positioned in those nations. “The supply chain of the new Apple iPhone and, at some point, the supply chains of the Apple TV, hope that this might help to demonstrate the complexity involved in manufacturing the Apple iPhone — a feature-rich product, I wish I could have, if I could afford it” (Supply Chain Management of Apple Inc 2010). Objectives of Apple Inc: 1. To maximize revenue. 2. To be the global leader among the high-tech brands. 3. To invent merchandises that will be useful, practical and sleek, and that which can appeal to customers all over the world, growing special attention to developed nations like Europe, United State and Canada, and the populous Asian states like Japan, China, India and South Korea. 4. To turn out to be the world's numerous organizations. The numerous marketing objectives that will facilitate in the accomplishment of the overall productivity target are: To be the one of the leading dealers of the MP3 players in every markets the company is involved To enhance sales by 20%. To enhance income by 20%. To increasingly enhance marketplace share by at least 15% in the year. To develop distributions to department storerooms by 10%. To enhance the brand consciousness to 60% of potential customers. Build up existing marketplaces by 10% in the next quarter. “Corporate Goals of Apple Inc: 1. Apple Inc. plans to manufacture and market computers and consumer electronics that are more user-friendly. 2. Apple Inc. will focus or opening more outlets even on international locations to help increase in sales” (Training and Development Program for Apple Inc. n.d., p. 7). SWOT Analysis of Apple Inc: Analysis of the internal environment of the company is done using SWOT analysis. SWOT means strengths, weakness, opportunities and threats that exist in a business. While strengths and weaknesses are considered to be a part of internal affairs, the external analysis of a firm consists of identifying its opportunities and threats. Apple Inc is an established organization that offers a wide range of home furnishing products, and the firm’s most important aspect is, it offers very good quality products at reasonable prices. “A SWOT analysis is a subjective assessment of data, which is organized by the SWOT format into a logical order that helps understanding, presentation, discussion and decision-making. The four dimensions are a useful extension of the two basic heading list, of pro and con” (Swot Aalysis 1995). Strength feature in Branding of the company. Innovation. Differentiated commodity. Higher quality. Retail strategy. Weakness appear in High cost proprietary system. Cannibalization. Less penetration and Niche market. Opportunities: Fast emerging industry in the world. Technological modernizations. Extend new commodities to the loyal consumers. High potential market for the music phones. Strategic alliances of the company. Threats: Wide-ranging competition. Substitute merchandises. Low cost competitors. Technological advancements. Financial system downfall. “Apple has been so successful in the lye gone years- thanks to its fresh, imaginative way to think and do its business: a winning combination of exceptional products, impressive style and design, great strategy, innovative marketing, sleek and enticing communications” (Analysis 2007). Analysis of External Atmosphere Using "PEST" & Explanation of Apple:  The PESTLE Analysis is a device that assists in determining the external environment of the company. By presenting these into political, economical, social and technological aspects, the devices offer a complete package on the factors that influence the organizations. Yet it cannot provide anything in opposition to them. The company operates in the macro environment, and there are various features that affect the business in the macro environment. The concerned Factors in the macro atmosphere are classified as PEST representations. Political: It is reported that in the year of 2007, 52% of sales of Apple were from outride America. Bad global relations, wars and violence might have influences Apple in an enormous manner; furthermore, all these are features beyond the capacity of Apple. Apple Inc. creates many of its elements and merchandises outside the U.S, like Cork, Ireland, China, Czech Republic and Korea. Economic: The economic factors include rates of interest, tax variations, economic developments, inflation and exchange value changes. The main factors are the healthy growth and development in the GDP, The improvising payment from various parties. This is important, as it may lead them to the change in high disposable income, and in the intense growth in economical constraints. The worldwide financial depression might have led huge impact on Apple Inc. While the price rise has been significant, the customers did not receive any remarkable benefits in the terms of value addition. Apart from this, the increase in the number of jobless people, consequent to recession, has instigated customers spending less on luxury merchandises, as Apple merchandises are probably viewed. Social: The social factors consist of the social Changes in trends, and the impact created on upcoming demands, projected for the merchandise convenience and compliance of folks towards work. Globalization consists of the interaction of populace worldwide, for which know-how plays the major role. Apple is in the international arena seen as the King of knowledge, not because of high use, but superiority and design. Another big community influence is the music business, which over the last decade has turned out to be practical because of access to the cyberspace. Technological: The technology feature consists of modernization, new product enlargement and the discarding of the obsolete ones. The technology marketplace for mobile phones and computers has turned out to be enormous adding more rivalry in the marketplace. Technology modernizations and their changes are also as quick as light, so the products durability is extremely short. Logistic Process Flow: “Logistics involves a wide set of activities dedicated to the transformation and distribution of goods, from raw material sourcing to final market distribution as well as the related information flows” (Rodrigue & Hesse 1998). The logistic process of the apple Inc comprises collection of various processes like transportation, consolidation, shipment and warehousing, there are useful in obtaining the products from the markets and in transporting items for the facilities involved in the other stages. Then sorting is carried out, which includes the testing, and disposing of the products. The subsequent process is the manufacturing, which includes the prototype testing, followed by the manufacture of the products in bulk quantities. The other step includes the distribution and the Sales; there are many intermediaries and retail outlets available for the sales of the product. As the Apple Inc is concerned more on products like the I-phones, the product procurement is from various places, and its manufacturing is in china. The Apple Inc doesn’t have the internal and external logistic flow in the organization; they have only one logistic operation within the organization. “The logistics cycle comprises the following: The logistic management information system (LMIS), which is at the heart of the cycle; Quality monitoring, which is a continuing activity throughout the cycle; and Policies and adaptability, which constitute the logistics environment” (The Main Activities in the Logistics Cycle n.d.). Each action in the cycle must be qualitative in consumer service. Logistics in organizations comprise numerous actions that carry the six privileges. Cycles consists of various interrelated activities. On the constructive face, it necessitates inventories, to meet unforeseen increase in consumer demands, and also the requirements for preserving security stores to service emergency requirements. Thus, the major characteristics, with reference to inventories would be to reach out to an unbiased and pleasant steadiness in the demand. This enables the equation of the business and the monetary expenses of inventory. Inventories need not be too high to cause cash flow troubles. They need not be too low even, to be not capable to meet consumer demands, and consequential failure of goodwill and earning of the organization. In addition it could also guide to other losses like obsolescence, damage and storage space, pilferage losses. Too small an inventory could effect in income losses by way of incapability in serving consumers. Trend on Future Logistics Strategy: Logistics is accepted worldwide as it has many advantages on the various aspects of any business. Logistics is advanced and its booming concepts are usually found in supply chain management as they are the key factors of the success of the company. Logistics play a vital role in increasing productivity, profitability and efficiency of any firm. “Global supply chains displayed gains in efficiency and customer service, but many companies took supply chain management (SCM) a few steps further by enhancing flexibility, responding effectively to demand variation and adopting environmentally friendly practices” (Singh 2011, p. 44). The Steps for Improvement of Apple Inc. Logistics are as follows: Speedy and smooth delivery, as well as acquisition system must be maintained within the business. Excess stock of possessions must be preserved in the organization to get rid of the possibility of discontinuity in work due to shortage of resources. The collection of the supply chain partners must be done based on the key criterion. All the workers concerned in the SCM movement should be trained well, so that their efficiency can be increased. A sharp and constant focus has to given on the diverse strategies adopted by the competing firms. All the key mechanisms in SCM process should be given due importance. Realize the new technologies in the organization that facilitate smooth functioning of the SCM process. Identifying the Feasibility / Limitations for Implementation: Developing and maintaining an efficient logistic system and best supply chain management system are considered to be risky as they require huge investments in. They facilitate the smooth and continuous flow of raw materials into the organization and also facilitate smooth flow of goods from the organization. The competitive advantage of a firm is usually felt when a particular firm is capable of delivering goods and services with the same quality at a lower price than that of the competitor. Each organization has its own competitive advantage. This facilitates the firm in building better-quality value to the firm among its customers, competitors and the society. Laws should enable foreign investment and the loopholes in supply chain have to be cleared so that a reliable supply and efficient come into existence. This can chain should be adopted which cater to the timely delivery concerning the increased demand in the United Emirates industries, along with good quality of raw materials. Conclusion: The study on Logistics of Apple drives home the fact that, addressing competitive elements are very crucial. Logistic management is one of the principal portions of supply chain management which help to prepare, execute and direct the well-organized firms forward and reverse the storage of space, products, service and related data, among positions between start and end point. The requirement for qualified SCM practitioners is on the increase almost in all areas of business organizations, trade and commerce requiring production and service segments. Reference List Analysis. 2007. Vertygo Team. [Online] Available at [Accessed on 16 February 2012] Delivering the Goods. 2000. LOC Global. [Online] Available at [Accessed on 16 February 2012] Rodrigue, JP & Dr. Hesse, M 1998. Logistics and Freight Distribution. Dept. of Global Studies & Geography, Hofstra University, New York, USA. Available at < http://people.hofstra.edu/geotrans/eng/ch5en/conc5en/ch5c4en.html> [Accessed on 17 February 2012] Singh, SK 2011. A Study on Stockist Within Mumbai “A Critical Study of Changing Phases of SCM in FMCG Sector” Scribd.com. Master of Management Studies. [Online] Available at [Accessed on 15 February 2012] Supply Chain Management of Apple Inc. 2010. Management Paradise.com. [Online] Available at [Accessed on 15 February 2012] Swot Aalysis. 1995. Businessballs.com. [Online] Available at [Accessed on 15 February 2012] The Main Activities in the Logistics Cycle n.d. Print. Training and Development Program for Apple Inc. n.d. Available at [Accessed on 17 February 2012] Read More