For eight straight years, Apple has been recognized as having the best worldwide supply chains in the "Gartner Global Supply Chain Top 25" ranking. In the most recent ranking, Apple was actually classified above the ranking as a "Master (Amazon.com was the listed the number one company). The Master status recognizes the accomplishments and capabilities of long-term global supply chain leaders in the Gartner Global Supply Chain Top 25. Companies qualify for the Masters category if their score places them in the top five rankings for at least seven out of the past 10 years. Numerous accolades have also been made about Apple's supply chain strategy, operations, and results. For example, Apple's supply chains "best demonstrate leadership in applying demand- driven principles to drive business results."Apple dominates because it consistently brings both operational and innovation excellence to bear in some of the most competitive markets in the world.* Basically, Apple gets a lot of credit in the supply chain profession for being able to ramp up volumes both in hardware and software while also uniquely helping redefine the consumer electronics market (e.g., iPhone, iPad, MacBook) Apple is the world's second-largest information technology company by revenue after Samsung and the second-largest mobile phone producer also after Samsung. In Interbrand's Best Global Brands report, Apple is now also the most valuable brand in the world. It overtook Coca-Cola in 2013 for the number one position after Coca-Cola's 13-year run at the top and has stayed at the top every year since that time. Apple has an estimated brand value of more than $170 billion. Few brands have enabled so many people to do so much so easily, which is why Apple has legions of adoring fans. These fans" or customers have downloaded apps for Apple's electronic gadgets more than 60 billion times The company's general supply chain model follows the path of most large multinational corporations' supply chains. They do research and development to cultivate new technologies and/or to acquire intellectual property needed for future products. They test the product concepts via marketing research, product testing, and total cost analysis. After that, Apple typically does a prelaunch of new products, where global production, sourcing commitments, inventory management, and so on are evaluated. The product launch involves doing demand forecasts resolving potential backlogs, and ensuring that the products are in the hands of its customers in as fast a cycle time as possible. After the launch, monitoring starts with periodic reviews of inventory, demand, life cycle status, and component cost forecasts. A number of factors make Apple's global supply chains world leading. First, early on, Apple took steps to manage the total value created in its global supply chains by managing its suppliers and all other providers within the chains. Predetermined expectations of suppliers, exclusivity in supplier arrangements, and volume guarantees ensured a supply chain infrastructure that could support Apple's aggressive market leadership. Apple's relationship building with its network partners is also a strength that has helped with increased scaling of production and resulted in improved quality in the manufacturing processes. Plus, and not to be underestimated, Apple has amassed lots of cash! The available cash funds have partially been used to place high-volume orders, which strengthen supplier relationships, and in other ways maintain global supply chain leadership.
here are some questions concerning apple's case study:
1. According to Interbrand’s analysis, Apple’s brand is valued at more than $170 billion, while Google in second place is valued at $120 billion and Coca-Cola in third is at $78 billion (2015). Do you agree that Apple should be so far ahead of its nearest brand competition? What about Samsung, which is larger in size (Samsung is valued at $45 billion)?
2. With Steve Jobs, Apple’s legendary founder and CEO, passing away in 2011, what can we expect from Apple in the future? Will they be as innovative? Will they remain brand value leadership? Will they run the top global supply chains in the world?
3. Apple products have usually been priced above their competition and sold for their value, intrigue, and market leadership. Some would say Samsung is catching up on many of these fronts and even passing Apple perhaps. Do you think Apple can charge a price premium for their products much longer?
4. Apple’s global supply chains make their business thrive. There is secrecy among suppliers, superior quality standards by every party involved in Apple’s supply chains, and a total value focus that ultimately makes the customers happy. Is this a sustainable business model for their global supply chains?