Supply Network of Apple Inc.
Kietzman and Niki (2010) defined total supply chain as “a network of retailers, distributors, transporters, storage facilities and suppliers that participate in the production, delivery, and sale of a product to the consumer” (p. 1). Several companies are involved in the supply network with the main aim of satisfying the needs of the customers. The key components of a supply chain involve suppliers of raw materials, manufacturers who convert the raw materials to complete commodities and distributors who ensure that the completed commodities reach customers. Therefore, total supply network involves several organizations such that raw materials are converted into finished products and distributed to the end users (Kietzman & Niki, 2010). In this paper I will explore the total supply network for Apple Inc.
Supply network of Apple Inc
Apple Inc. is a company that manufactures computer hardware, computer software and electronics. The headquarters of the company are located in Cupertino, California and Steve Jobs is the president of the company. Apple Inc. specializes in manufacture of innovative products to capture a large number of customers in the global markets (O’Grady, 2008). Several companies are involved in the total supply network of the company. Different components are sourced from different companies and assembled in the company and the finished products are distributed to consumers in the global markets. The company has made contracts with several companies such as General Electrics (GE), Samsung Electronics and others to supply with raw components for assembly. Apple has established several manufacturing plants in the country and abroad to develop the products. The marketing system of the company is well defined such that several companies are involved in the process. Apple has established the strategy of retail stores and online stores to sell its products to customers in the global markets (O’Grady, 2008).
There are several factors that have affected Apple’s decisions regarding which parts of the network to outsource or keep in-house. The cost of transporting components and finished products has been a major factor affecting the selection of the supply network. The management has introduced innovative technologies to enhance development of specific components within the company to avoid exposure of trade secrets about their technologies to competitors. To link the company to the global markets, Apple has established agreements with several retailers in the global markets to distribute the finished products of the company (O’Grady, 2008).
Location of capacity
Apple has planned for the location of capacity in that components are sourced from companies within the regions where the company has its operations. The management of the company has established a well defined system of production to control the costs of production by contracting suppliers within the locality where the company manufactures its products. Apple has established retail stores which are located in different parts of the country. The retail stores are located near to the consumers to attract as many buyers as possible (O’Grady, 2008).
Total supply network provides an organization with a system of acquisition of raw materials, manufacturing and distribution of finished products. The entire process involves creating contracts with different companies for the efficient production and distribution of finished products. Apple has a well defined supply chain network which involves the production and distribution of computer hardware, software and electronics. More suppliers should be involved in the distribution process to reach as many customers as possible.
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