Apple's Management and Performance - Research Paper Example

?Management at Apple Task: Location Strategies Location strategy is significant factor in any business because of its abilityto bring success to the company. Therefore, if an organization such as Apple selects a wrong location, it may affect its client base, employees, infrastructure and materials among others. On that note, for a company such as Apple to succeed in business it needs to consider a number of factors. These include labor, feasibility, facilities, logistics, community and site, incentives, environmental regulation and governmental regulation (Head, 2007). Apple Company is located at Cupertino, California was established in 1976 and deals in personal computers, computer software other consumer electronics such as iPods, iPads, iPhones and tablets among others. In addition, the company has about 60, 400 permanent workers with 2,800 part time spread in more than ten countries and operating in about 357 retail stores with a present $65.23 billion “It plans to open a total of 25 stores in China by the end of 2011” (Head, 2007). Furthermore, Apple Company being a technology organization has used the location-based services strategy. This involves using an advertising platform that sends various offers to its clients from the nearby shops and restaurants. Similarly, Apple Company has been able to increase its sales and profits through venturing into the international markets such as China and Japan. In addition, departing from the domestic market to enter the international market by Apple has lead to reduced costs of production and the ability to trade in various markets hence lessening the dependency on one market. Supply chain management Supply chain management involves the organization and control of assets such as equipment, human, components and relationships such as customers, staff and suppliers among others in the production and delivery of customer’s commodity from unprocessed product to completed product as competently as possible. Apple Company is known to conduct its sale with a minimal physical supply sales chain. Instead, Apple uses digital supply chain involves distribution of digital media such as video or music though electronic medium from the provider to the client. For instance, through its virtual stores, Apple has been able to generate about $ 1 billion from iTunes sales only. “This can be considered as the first step by Apple towards implementing agility in its supply chain” (Sanders & Reid, 2007). In addition, the company has the ability to make sales worth more than I billion of MP3 files without factors of physical supply management such as material sourcing, production, warehousing and transportation among others. These sales extend to iPhone mobile that do not use the normal supply chains. There are numerous advantages that are enjoyed by Apple in its usage of digital supply chains. For instance, increase in margin of hardware sales, increased maneuvers in the market because of higher flow of cash and the ability to provide what is on demand at right time. Therefore, because of this innovative idea of modern supply management, competition has increased among IT companies such as HP, Dell and IBM adopting and improving their methods. On that note, Apple has come up with its new design of supply chain called product lifecycle management (PLM). It is a programmed software that allows manufacturers from around the world to process the products they want using a collaborative design. “Thus the equation of achieving agility in supply chain versus risk in meeting demand had to take shape for Apple” (Lebreton, 2007). Similarly, it permits the manufacturer to share and manage complicated design and commodity detail that aims at ensuring the proper development process of commodity. Inventory management Inventory management involves indicating the shape and percentage of completed products an organization has to sell. Numerous factors affect inventory of management of Apple Inc. Company. For example, there are the physical place of the inventories such as the place that the Apple Company can store its computer chips other related products. Furthermore, physical strategy reduces the amount of inventories required by Apple and this leads to low investments in the purchasing of chips, computers and other electronic parts from the market. Another factor of inventory management is the exchange rate especially when Apple is exporting and importing its products out and in of the country. “Firms use their well known products, such as those sold by Apple, to enter new international markets” (Marklund & Laguna, 2001). On that note, there are export and import tariffs or quotas (Marklund & Laguna, 2001). For instance, the intervention of U.S chipmakers during the period Apple bought computer chips at bargain price from the Japanese caused the Apple Company to increase its chip inventory price. However, prices suddenly fell and the Apple Company remained with an oversupply of outdated computer chips resulting low prices and hurt profits. This, therefore, calls for effective inventory management. Additionally, taxes affect inventory in terms of taxation upon other property assets and inventories. Aggregate planning This is a business tool that assists a manager in connecting strategy and innovation in organization. On that aspect, many organizations develop an aggregate planning called planned obsolescence. This method entails deliberately developing or manufacturing and distributing a commodity to the client with the intention of the product to become useless at a short duration in order for the customer to come again. This is for the client to come and purchase the next generation of commodity. For instance, Apple Company persuades its client base into purchasing its products such as iPods and iPads by making the current products obsolete after less than a year in order for the customer to buy the next model of the products. For instance, iPods used hidden Lithium batteries in its body that only lasts a year. Therefore, when the second year begins the user has only limited period to listen to his favorite tunes hence he will purchase the latest model that is attractive and with a long lasting battery. This strategy of aggregate planning is intended to boost lasting sales volume by lessening the period of buying a commodity twice. “The goal of such planned obsolescence is to generate long-term sales volumes by reducing the time between repeat purchases” (Pearl, 2011). JIT & lean operations JIT (Just-in-Time) operations involves a production strategy that aims to progress a business return on investment by dropping the in-process inventory and related carrying costs. Sometimes it is called the Toyota Production System and it affects features of operations such as stocks, suppliers, quality, employees and production. Similarly, Apple solved its production operation by lessening its warehouses to nine regional sites and shutting down other ten. This happened because product inventory took more than 70 days with a value of $500 million hence slowing down profits. “In 2010, Apple’s sales increased by 900 percent to $1.3 billion with about 2 million iPhones sold in the second alone” (Marklund & Laguna, 2001). On that note, Apple Company through its procurement executive convinced companies that are its major suppliers to create production nears its facilities to enhance just-in-time delivery. In addition, the computerization of various business activities helped in transforming modes of operation. Furthermore, Apple Company used computer networks that assist in reducing costs and increasing productivity (Marklund & Laguna, 2001). By using computerized Just-in-Time operations, Apple was able to eradicated waste witnesses in production-consumption loop and encouraged slicing down of warehousing operations that unpurchased commodities and stock supplies. Alternatively, Apple Company through its factory assembles Macintosh using automating parts handling operations. This entails application of just-in-time delivery that is equipped with an automated material delivery system. When computers arrive in the factory, they get unpacked in separate containers. It is significant to observe that the distribution at the workstation is computer controlled and reducing human labor costs and saves time. In addition, this automated just-in-time delivery system allows only handling of computer parts twice. “The plant used JIT delivery of parts the day they were needed for assembly” (Head, 2007). This is the time of unpacking and assembling the parts. In lean operations involves a production practice that gives priority to the expenditure of resources for any objective apart from the establishment of value for the end user to be wasteful. On that perspective, it aims at a systematic eradication of wastes in the operations of a company that may not be beneficial to the client. “Lean seeks to create flexible distribution operations that respond to change market needs” (Sanders & Reid, 2007). Furthermore, Apple Company has used lean manufacturing operation to boost its manufacturing flexibility and velocity, enhancement of its first time product quality such as iPhones, iPads, iTunes and other computer products it release into the market. In addition, the company has used this method to lessen the necessities of goods or service production resource in terms of capital and materials. Similarly, Apple Company is using lean operations together with complicated approaches in boosting their levels of competition. Apple Company has also become unique it business operations apart from regular competitors such Microsoft and HP companies. This through lean operations of forgoing the cost savings found in outsourcing functions. Through lean strategy, Apple has been able to increase its growth in market with the company being able to open its retail outlets with iPod as a single business unit. In addition, through lean strategy, Apple was able to generate about 39 percent of revenue all accrued from its music type of products in 2005. Furthermore, the incorporation in 2001 of the iPod digital music player and the music store of iTunes in 2003 was a major boost for the company (Pearl, 2011). Finally, the Apple Company has used the lean manufacturing method through its development of new products that come successively. “A simplicity, flexibility, and market-driven approach built around principles in distribution” (Lebreton, 2007). For example, its products such as iPads, iPhones, iTunes and iPods are developed with innovative technological and client experience. This has been achievable through successful application of high-end manufacturing efficiencies, global supply chains with reduced costs and advanced marketing abilities. Apple has hence applied innovative and creative techniques in ensuring they are ahead of their competitors with limited costs and returns of higher profits from its products. References Head, K. (2007). Elements of multinational strategy. New York, NY: Springer. Lebreton, B. (2007). Strategic closed-loop supply chain management. New York, NY: Springer. Marklund, J., & Laguna, M. (2001). Business Process Modeling, Simulation and Design. New Delhi, ND: Pearson Education India. Pearl, M. (2011). Grow Globally: Opportunities for Your Middle-Market Company Around the World. New Jersey, NJ: John Wiley& Sons. Sanders, N., & Reid, R. (2007). Operations Management: An Integrated Approach. New Jersey, NJ: John Wiley& Sons. Read More