Continuous Improvement in Apple - Case Study Example

Continuous Improvement in Apple Name: Tutor: Course: Date: Introduction Continuous improvement is assessed through identification of market segments falling under a market profile such as creative professionals, business, high end customers and education. The product innovation captures a specific market through a balance of technology push versus a market pull. The employees have a culture of one product at a time which was inculcated by Steve Jobs. The only thing employees could think of was that in the mind of the boss. The organizational culture has allowed for constant innovation through evaluating and assessing the needs of the market. The content and timing of certain aspects of communication are important during product launch and strategic building. The organization has put in place communication plans to ensure that all the stakeholders receive the appropriate message effectively and expediently (Apple 2008). The primary responsibilities KPI in sales, HR, customer service, procurement among others are the basis of responsibility in setting objectives and goals. The essence of this report is to provide practical steps and concrete guidelines on continuous process improvement are one way of increasing the ability of performance management processes in the organization. Extent of Continuous Improvement in Apple Inc Apple Company is steadfast in continuous improvements of its products. The company does appraisal every two years to assess the possibility of innovating on the current products or coming up with a new product altogether (Apple Inc, 2008). The company is rapid in setting and maintaining the pace for innovative products. It has over the past been a fast follower taking advantage of fast second intervention. In 2001, there were market leaders like Walkman and Sony who came up with MP3 devices and Napster downloads who had first mover guidelines. Apple was able to exploit the syndicated supplier business model to race the market timetable. The process of innovation is not from team to team but a design that is largely integrated. Apple has been able to work on parallel product development through departments and not discrete or sequential. The development off iPod, iTunes and iPad were all enabled through an enabled framework and organizational environment. Under Steve Jobs, Apple was a continuous process because the founder could work on a specific product until its design works out in the market (Apple Inc, 2008). The company understands the needs of current customers and leads in designing and development of such products which are patented by Apple. Continuous Improvement Model or Processes The continuous improvement model is a market pull pushing the technology. Apple is able to manage from the extreme by being a technological innovator. The marketing framework is influenced by relative financial strength, market and market attraction (Imai, M 2002). For instance, iPod came up with a marketing slogan as ‘one thousand songs in the pocket’ which shifted from being a product innovation to a concept that made consumers to think of ‘music on the move’. This was followed by a strategy to make Apple Mac a digital music hub, DVD, Video from where music was identified to stage the first electronic device. The plethora of price points that followed saw the innovative products such as iTouch go for $399 and iPod selling at $49. The product extension is the defensive market tool used by Apple. The company after introducing their products is ready to counter the reaction of its competitors through product point proliferation and product differentiation (Paul H S 2002). The idea is to generate a depth and width of product offers making it difficult for competitors like Microsoft to leap. By doing so, Apple easily defends its market position while constantly reviewing the needs and tastes of existing and prospective consumers. Continuous Improvement as a key part of the Organizational Culture Apple has succeeded owing to an organizational structure that provides for product development. The structure us a ‘dart board’ structure that ensures that the CEO accesses all the process and individuals within the organization. The morale of employees is based on a good work environment and better compensation which improves the image of the organization. All employees have been made to believe that Apple is a place of change, development and creativity (Paul H S 2002). The systems and processes have been able to favor and embrace product innovation since employees know that they are safe with their financial and concerns taken over by Apple. The company also rewards awesomely those employees who develop innovative processes or products. In effect, all the employees are known to be the greatest asset to the company hence retention is important (Imai, M 2002). The firm is all steadfast in employee diversity which has ensured that different collections of people become a great asset to the company. Employees of Apple know that the growth of the company is synonymous to their own growth. Effective communication in engaging and informing Stakeholders on the Continuous Improvement Processes Apple appreciates the power of internal and external relationships between employees, customers, suppliers and management. The brainstorming session is between the management to discuss the new product and how it will impact the market and sales. The decisions of the management regarding the inception of the new design are co-opted to the middle level management through boardroom meetings and e-mails. All employees are then drawn to a town hall meeting where the grand plan of unveiling a new product is made with all the design specifications and components discussed (Paul H S 2002). A pilot study is taken carried out to determine how consumers react to the product such as iPod Nano. A positive communication from potential customers extends to Apple suppliers who are given specifications on parts and materials to be supplied. Communication between various product departments eases the flow in the production process and rapid development of the product in the factory floor. Clear communication ensures that the intended objective is achieved through self regulating and logical flow of systems and processes. The management is able to get feedback with expediency when the channels and modes of communication have less hitches and barriers. Encouraging Individuals to use Initiative in Continuous Improvement Processes Apple takes pride in its employees especially when they achieve company objectives such as sales targets, outstanding innovation, selfless customer service and corporate responsibility. The company rewards talent and initiative by rewarding the pioneers in various ways. The DoCoMo iMode of 1999 were initiatives of three individuals who were named after the product. The basis here was Apple to become a leader through its employees who lead. The iPhone was a product of continuous improvement since others had done it commercially but they managed to reshape into a totally unique ecosystem by taking the best ideas and improving on them. The idea of taking initiative is incremental though small but finally adds up to be patentable (Imai, M 2002). It is known that initiative allows for consistency of actions and clarity of purpose since customers always go for new technologies and inventions. The mass markets always rely on individuals and not masses to influence their tastes and preferences. The popularity of iPad ‘tablet’ is an initiative that saw reduction in weight and size of the laptop which has also doubled as a mobile phone gadget. Initiative always drive leadership and reputation since a company known for its dominant status increases its market share owing to dependability and confidence among existing and prospective users (Apple Inc, 2008). Monitoring of Operational Progress Monitoring and evaluation of all the stage in the product lifecycle is essential. The use of inspection and evaluation tools help in problem identification, areas requiring additional resource back up and aspects demanding greater human resource. The importance of process monitoring is not underestimated by Apple. The management has internal system engineers who trouble shoot and identify challenges to product progress. The essence of monitoring the product stages is to establish the strength and weaknesses of materials, human resource, systems, and outputs. Process monitoring allows for queries in a logical and sequential manner so that an informed decision is finally made (Paul H S 2002). The rationale is to have products meet customer requirements and that the processes have been planned, improved and controlled. Increasing the effectiveness and efficiency of process helps to reduce rejects and lower the cost of re-work. Faulty procedures can be easily stopped and investigations started to point out the existence of errors. From then on improvements can be made to avoid repetitions of errors and omissions. Some situations allow for greater control of costs, time and schedule to the product in the factory floor. Use of Statistical Analysis in Measuring Performance The key statistical analyses are sales figures and forecasts as well as product performance in the market compared to those in the competition or brands within the company. The figures are obtained through market research from stores, wholesales and individual customers. Survey studies help to obtain data from customers on perception of particular brands like iPod Nano when compared to iTunes Music store. Similar data can show how the sales in stores and outlets showing the movement of stocks of iPad mini when compared to those of Microsoft and Samsung. Slow moving products can be determined by taking regression analyses which establishes the relationships between products and social demographics. The management can then use the data for decision making that informs further proliferation or change of product features (Apple Inc, 2008). The iPad mini since 2011 has won the mass markets in Europe, China and Australia meaning that the product performs well in those markets in real time. The mobile phone market is still held by Samsung and Sony which means that Apple being in the third place should leapfrog and acquire some new markets through design of products that suits new market segments. The idea of moving averages and sales forecasts predicts the market performance of these products before undergoing process improvement. Key Result Areas and Key Performance Indicators for Work Teams The company has developed a number of KPIs for instance leading KPI. The essence of it is to drive the performance of the outcome determinant, being predictor of failure or success. Apple applies leading indicators through assigning 20% of its employees to participate in the innovation process (Paul H S 2002). The input KPI helps in reflecting the resources and assets used to or invested in generate business results through process improvement. Apple has 3880 number of employees in the headquarters or 5 knowledge materials distributed to employees every week. Apple also utilizes process KPI by establishing the productivity or efficiency of a business improvement process. For instance, aiming an average 10 product-repair cycle time and ensuring 98% On time delivery or 5 minutes mean time to repair. Output KPI determines the nonfinancial and financial results of business activities such $ 20,000 Bonus payout for new business brought in or 15million new customers acquired. Apple also assesses the outcome KPI by reflecting on the impact or overall results of the business activity from generated benefits as a means of quantifying performance (Imai, M 2002). Apple ensures 78% Customer retention, 6% Employee turnover and 93% Brand awareness. Apple also keeps stock of Key results Area (KRA) as general areas of outcomes or outputs for held by various departments. The managers prioritize their activities hence improving on time/work management. Value-added decisions are made and results and not activities become a center of focus. Roles are aligned to the strategic plan or to the organizations business (Apple Inc, 2008). The purposes of these roles are communicated to other employees. In Apple sales, training, Purchasing, manufacturing, quality e.t.c take at least 5% of the work roles while 80% is committed to work roles. Monitoring and Documenting the Performance of Work Teams Human resources professionals do understand the usefulness of optimal performance management though with major internal obstacles. A typical response when someone talks about performance management or a review in an organization is a cringe by both employees and managers. All prefer avoiding performance management related tasks or visions regarding to tracking of ongoing appraisal forms are subject to changes. Forward looking companies are taking successfully steps to tackle this negative view of performance management (Rose, 2005). Many are executing innovative solutions where processes provide actual results and increase performance. Furthermore, a emerging is new class of automated performance management solutions that has benefited corporate, small- and medium-sized businesses. Performance management extends beyond review or employee performance appraisal. Properly constructed appraisals show a representative a summary continuous dialogue that runs through the year. In Apple, focus is made not only on a yearly appraisal form but monthly documents that points to under appreciation and misunderstanding of performance management benefits. The managers in this set up can measure optimize productivity and evaluate individual performance (Paul H S 2002). An effective performance management process allows for alignment of individual employee's daily actions with strategic business goals. Performance expectations are optimized to provide for visibility and clarification of accountability. Also documented is the individual performance to support career planning and compensation decisions. Continuous improvement establishes a focus for learning activity choices and skill development. Finally, developing documentation for legal purposes that reduce disputes and support decisions Business and Operational Planning in Continuous Improvement Continuous improvement processes in Apple are based on systems approach to improving the work flow. Planning phases of the model consist of an analysis phase to point out specific problems in which teams carry out interviews and brainstorming sessions to obtain relevant information (Imai, M 2002). The design phase is largely a stage for the project team to establish action that remedies the problems. In the implementation stage, the team members with the task of undertaking the tasks execute the action. Project team members see how individual tasks reflect on the business's entire process (Paul H S 2002). Project planning teams work closely hence work group conflicts are resolved as an effort in continuous improvement. Project teams scrutinize processes to find out the beginning and end points. Planning process is triggered by a team member who undertakes action based on input from a supplier, stakeholder, or other team mates. The ultimate trigger gives rise to the process output going on to the customer. The activities in continuous improvement process evaluate every step to point out where the problems exist. Conclusion The report has established that continuous process improvement is critical by assessing and recommending action to activities of Apple Inc. Company. The launch of new products like iPod Nano was a continuation of product improvement in the digital hub strategy as well as product differentiation. The premium pricing strategy was a great experience of testing the reaction of the market and evaluating sales volumes prior to taking on a competitive price platform (Apple 2008). This ensures that process or product improvement is abreast to sales hence compensating for the innovation effort. Employees should be taken through training and brainstorming sessions to establish new solutions and effective processes. Every idea suggested by junior employees is taken seriously and logically analyzed for viability. Communication between various product departments eases the flow in the production process and rapid development of the product in the factory floor (Paul 2002). Initiative always drive leadership and reputation since a company known for its dominant status increases its market share owing to dependability and confidence among existing and prospective users. Finally, the evaluation stage makes team members to monitor the outcome and establish whether adjustment to the process can generate desired results. The benefits of continuous improvement processes to any organization are enabling project team members to unravel challenges and find out ways to fix them. Reference List Apple Inc, 2008, Strategic Plan. New York. Imai, M 2002, Gemba Kaizen: A Commonsense, Low-Cost Approach to Management (1st ed.). McGraw-Hill.  Paul H S 2002, Sales Process Engineering: An Emerging Quality Application. Quality Progress: 59-63. Rose, K H 2005, Project Quality Management: Why, What and How, Fort Lauderdale, Florida: J. Ross Publishing. p. 41.  Read More