Supply Chain Management Principles - Assignment Example

? Supply Chain Management principles Contents Contents 2 Supply Chain Management at Apple 3 The make-buy decision 4 Sourcing strategies and supply chain configurations 5 Strategic supplier selection 6 Aligning supply with corporate strategy of Apple Incorporation 7 References 9 Supply Chain Management at Apple The supply chain management practice of Apple Incorporation reflects dependency on a highly sophisticated system incorporating the digital interface. Both the supply and sales management functions of the company of high scale physical products like computers and I-Pods are conducted based on a virtual interface with the suppliers and consumer groups. It is found that the company earns a significant amount of revenues of around $1billion on an annual basis through conducting of sales of the computers and I-Pods through the online store. The process of conducting supply chain activities on a digital interface largely conducted by Apple Company reflects no physical activities pertaining to the procurement, stocking, transportation and other such conducts which are increasingly observed in regards to conservative warehousing practices. Apple through the help of online digital supply chain activities is found to conduct a billion transactions pertaining to media files in an annual period. The supply chain activities conducted over the digital sphere like the traditional warehousing activities also require the existences of products produced to be marketed to the final consumers. However unlike the traditional warehousing functions the supply chain management functions performed on a digital platform require only two parties i.e. the one providing or producing the content and the other the final consumer to whom the digital products would be transported. In turn the supply chain activities conducted by the company on the online sphere by Apple Incorporation is viewed as that which has helped in transforming the traditional supply chain concepts originally practiced by the company’s manufacturing and selling physical products. In evaluating the effectiveness of the supply chain activities conducted on a digital sphere it is found that Apple Corporation has a significant number of stock or inventory turnovers in comparison to other firms (Blanchard, 2010,p.71-72). The make-buy decision The make or buy decision is considered as a strategic decision in regards to supply chain management activities of companies. It is because the activities conducted in the realm of supply chain management activities contain large amount of outsourcing functions both in terms of procuring the materials from the supplier’s end rather than making such. Again the company can take help of distributors to help them distribute the products produced to the ultimate buyers. Thus in the former function it is found that materials are procured rather than producing such in the production units of the companies while the latter activity focus on gaining the supply chain support to sell the products produced by the firm. In the act of procurement of products from suppliers the firm focuses on enhancing the parameters of core competence. Similarly because of the lack of proper infrastructure the distributors support is gained to distribute the products to the consumers in an enhanced manner (Wisner, Tan and Leong, 2008, p.52-53; Chitale and Gupta, 2007, p.9). The firms also tend to produce their products for it helps to reduce the risks associated with procuring the products from the external environment and also saves time and money expended by the firm in the search for the right suppliers. Buying in addition to increasing the risks also makes the firm spend huge money and time while the function of making requires the firm to assimilate all its resources to produce the products and thus reducing the level of core competencies (Berk, 2010, p.90-91). The making or buying decision process also requires the evaluation of the different risks associated with such. In regards to making the product specific risks arises relating to the availability of proper resources and expertise needed to produce such. Similarly in regards to the buying decisions the evaluation of the potential of the suppliers needs to be done in regards to delivering the products on a timely basis and their solvency positions (Misra and Yadav, 2009, p.220; Jackson, Sawyers and Jenkins, 2008, p.251). In regards to the make or buy decisions the case of Apple reflects that the company focuses on making the largest selling products like IPods to counter competition from the large players like Blackberry. The firm uses strategic resources to produce a number of gadgets iPod while countering price competition with firms like Blackberry (Kaminsky, 2010, p.164). Sourcing strategies and supply chain configurations The supply chain configurations are found to vary along the complexity of the sourcing processes undertaken by the company procuring the different products. Here the supply chain configurations mainly four in number are evaluated along two heads viz. the complexity of the industrial environment and the supply chain processes taken in regards to such. The supply chain configurations depending on the parameters of efficiency, agility, responsiveness and accuracy is decided based on industrial complexity based on technological and product diversifications and availability of resources. Configurations based on responsiveness and agility both focus on enhancing the productivity of the supplier network through change in the processes or policies. However the latter focuses more on the consumer’s needs. (Bidgoli, 2010, p.126-127). In regards to the Apple Corporation it can be stated that the company performs on the basis of agility in the supply chain configuration owing to high amount of complexity in the external business environment and the strategic relevance of the digital supply chain practices of the company. Operating on the digital interface symbolises larger amount of dependence and trustworthiness on the supplying population which helps to compete significantly with the competitors. Strategic supplier selection The strategic supplier selection process encompasses some salient steps which must be taken into consideration to rightly choose the effective supplier. The first step is to do considerable market research to help evaluate the potential of the different suppliers. From such a proper screening is conducted to chalk out the right category of suppliers needed for meeting the business objectives. In the second step after having preliminarily identified the suppliers the certificates and the network potential of the supplier population is evaluated to rightly identify the effective suppliers. In the final stage high amount of screening should be made in effectively evaluating the commitment of the suppliers who have been screened earlier. This practice of strategic selection would help in potentially identifying the right supplier profile required for the business (Benton and McHenry, 2009, p.66-67). Apple Incorporation requires the supplying population of the company to be quite committed in regards to delivering the right quality of products and materials. Such materials are required to fulfil high quality standards and are required by the suppliers to reach to the company on timely basis. The suppliers of the company are required to increasingly satisfy the cultural parameters of Apple to be rightly chosen as the strategic group of vendors. Further the vendors are also required to put in their information in the database of the company which is maintained by Apple Incorporation. The skills and capabilities of the suppliers are significantly evaluated in terms of their ability to render innovative products to help satisfy the needs of the consumers. The capabilities of the vendors in terms of rendering of quality products are evaluated based on effective standards to rightly judge the potential suppliers which would help the company in meeting its stated objectives. Apple Incorporation maintains quality standards and codes to effectively judge the potential of the supplier groups (Apple Inc., 2011). Aligning supply with corporate strategy of Apple Incorporation The corporate strategy of Apple Corporation can be studied mainly at two levels. Firstly the strategy is studied at the general or level of headquarters and secondly the strategy is also studied in regards to the performance of the business of the corporation. The study of the corporate strategy in regards to the business corporation is based on the objectives or mission of the business corporation and the activities the company performs to achieve such underlined objectives. The general level corporate strategy underpins the decision which the directors of the business corporation take in regards to deciding on the nature of the business to be conducted by the firm. Apple Corporation in the initial stage decided to move into the electronics business. However later on the management of the business corporation decided to shift over to the realm of distributing recorded music files to the final consumers. This change of business philosophy adapted by Apple signified change in the cultural parameters of the concern. Corporate strategy at the business level is involved with the alignment of the different resources and optimal utilization of such to gain competitive advantage over the different competitors. Apple in regards to the same is found to have rendered huge amount of financial and technological resources for the production of computers and different levels of iPods and iTunes which helped the firm to gain a larger competitive advantage over competitors like Dell and Blackberry (Lynch, 2007, p.42-43). The corporate strategy of Apple analysed in the above scenario required the company to revamp its supply chain management process. The company which started with the production of personal computers and then moved over to the production of sophisticated products like Macintosh and other gadgets like iPods also worked to digitalise its supply chain activities. This activity helped the firm to gain a larger network of suppliers who helped the firm to meet the business objectives (Gershon, 2008, p.366; Pantaleo and Pal, 2008, p.266). References Apple Inc. (2011). Apple and Procurement. Available At: http://www.apple.com/procurement/. [accessed on August 4, 2011]. 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