BUS 4480 Global Supply Chain case analysis do not copy! it’s very important! do not copy! Case write-ups should be submitted on canvas and should be doubl | Homework Answers

BUS 4480 Global Supply Chain case analysis do not copy! it’s very important! do not copy!

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Case Title Apple: The Best Supply Chains in the World?
closing case
For eight straight years, Apple has been recognized as having the best demonstrate leadership in applying demand-driven principles to drive
worldwide supply chains in the “Gartner Global Supply Chain Top 25” rank- business results. “* “Apple dominates because it consistently brings both
ing. In the most recent ranking, Apple was actually classified above the operational and innovation excellence to bear in some of the most
ranking as a “Master” (Amazon.com was the listed the number one com- competitive markets in the world.”* Basically, Apple gets a lot of credit in
pany). The Master status recognizes the accomplishments and capabilities the supply chain profession for being able to ramp up volumes both in
of long-term global supply chain leaders in the Gartner Global Supply hardware and software while also uniquely helping redefine the consumer
Chain Top 25. Companies qualify for the Masters category if their score electronics market (e.g., iPhone, iPad, MacBook).
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
*D. Hofman, “The Gartner Supply Chain Top 25,” 2013, www.gartner.com/
strategy, operations, and results. For example, Apple’s supply chains “best technology.
Apple is the world’s second-largest information technology company employees at Foxconn in China (one of the Apple suppliers). Plus, there
by revenue after Samsung and the second-largest mobile phone producer was a U.S. Senate hearing that investigated Apple’s “highly question-
also after Samsung. In Interbrand’s Best Global Brands report, Apple is able tax minimization strategies. Now, on the more positive side, Apple
now also the most valuable brand in the world. It overtook Coca-Cola in has a portfolio of potential blockbuster products, welcomed upgrades,
2013 for the number one position after Coca-Cola’s 13-year run at the top and innovative services in the making that are sure to remind its fans
and has stayed at the top every year since that time. Apple has an esti- why they favor Apple products,
mated brand value of more than $170 billion. “Few brands have enabled The challenges attached to these new offerings are sure to test Apple’s
so many people to do so much so easily, which is why Apple has legions of leadership in both brand value and best global supply chains. To some
adoring fans.” These “fans” or customers have downloaded apps for degree, the future challenges are clear. To stay at the top of its industry,
Apple’s electronic gadgets more than 60 billion times.
Apple has to succeed in slowing Samsung’s momentum and capturing the
The company’s general supply chain model follows the path of most booming Chinese mobile phone market. As always with Apple, as set in our
large multinational corporations’ supply chains. They do research and de expectations over the years by Steve Jobs’s “one more thing” announce
velopment to cultivate new technologies and/or to acquire intellectualments, CEO Tim Cook and the now Apple leadership team must keep com-
property needed for future products. They test the product concepts via municating to the market that their vision, innovations, and leadership can
marketing research, product testing, and total cost analysis. After that, drive the idea that Apple’s best days are ahead. As one way to do this,
Apple typically does a prelaunch of new products, where global produc- Apple is on a hiring binge in Asia, adding hundreds of engineers and sup-
tion, sourcing commitments, inventory management, and so on are evalu- ply chain managers to its staff in Shangai and Taipei as it seeks to increase
ated. The product launch involves doing demand forecasts, resolving the speed at which it introduces new products. Plus, with Cook as the CEO,
potential backlogs, and ensuring that the products are in the hands of its Apple has a global production and supply chain management expert at the
customers in as fast a cycle time as possible. After the launch, monitoring helm who constantly scrutinizes Apple’s supply chains, production opera-
starts with periodic reviews of inventory, demand, life cycle status, and tions, and fair labor practices.
component cost forecasts.
A number of factors make Apple’s global supply chains world lead. Angela Moscatole. “Apple Unseats Coca-Cola as World’s No. 1 Brand of 2013PC
ing. First, early on, Apple took steps to manage the total value created Magazine, September 30, 2013, http://in.pcmag.com
in its global supply chains by managing its suppliers and all other “Apple Reports Fourth Quarter Results,” https://www.apple.com
providers within the chains. Predetermined expectations of suppliers, Sources: D. Hotman, “The Gartner Supply Chain Top 25, 2013, www.gute.com
exclusivity in supplier arrangements, and volume guarantees ensured a
technology. interbrand’s Best Global Brands 2013. www.interbrand.com, Apple
Is the World’s Most Valuable Brand at $98 Billion.” The Huffington Post, September
supply chain infrastructure that could support Apple’s aggressive mar- 30, 2013. Apple Reports Fourth Quarter Results, Apple Press Info October 21,
ket leadership. Apple’s relationship building with its network partners is 2008: E. Doe, “Apple Goes on Hiring Binge in Asia to Speed Product Releases.” The
Wow Street Joumal, March 3, 2014 http://www.wsj.com/artides/SB100014240527
also a strength that has helped with increased scaling of production and
023043607045794166602155078165 American Customer Satisfaction
resulted in improved quality in the manufacturing processes. Plus, and Index, http://theacs.org. Foung Apple’s Supply Chains.” The New York Times, April
not to be underestimated, Apple has amassed lots of cash! The avail. 2. 2012 http://query.nytimes.comigstrullpage.html?res-9003EED91F3FF9314357
57004964908863).
able cash funds have partially been used to place high-volume orders,
which strengthen supplier relationships, and in other ways maintain
global supply chain leadership.
CASE DISCUSSION QUESTIONS
Using its supply chain infrastructure, Apple has managed to solve
1. According to Interbrand’s analysis, Apple’s brand is valued at
most of the challenges it has faced. For example, while the global eco-
nomic downturn in 2008 presented problems for virtually all companies,
more than $170 billion, while Google in second place is valued at
Apple came through it in great shape. At the time, CEO Steve Jobs said,
$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
“We’re armed with the strongest product line in our history, the most tal-
ented employees and the best customers in our industry…. Apple just
competition? What about Samsung, which is larger in size (Samsung is
valued at $45 billion)?
reported one of the best quarters in its history.” Other challenges that
Apple is facing include obtaining enough quality components for its con-
2. With Steve Jobs, Apple’s legendary founder and CEO, passing away in
sumer electronics, potential for supply chain disruptions (natural and
2011, what can we expect from Apple in the future? Will they be as
people created), dependence on third-party logistics providers, and in-
innovative? Will they maintain brand value leadership? Will they run
ventory management issues. In each case, so far, Apple has strategically
the top global supply chains in the world?
solved major issues to the satisfaction of the marketplace (the company 3. Apple products have usually been priced above their competition and
consistently ranks at the top in “customer satisfaction in the American sold for their value, intrigue, and market leadership. Some would say
Customer Satisfaction Index).
Samsung is catching up on many of these fronts and even passing
However, everything is not all rosy or positive about Apple. The com-
Apple perhaps. Do you think Apple can charge a price premium for
pany’s reputation has taken a few hits recently. For example, Apple was their products much longer?
found guilty by a U.S. court of conspiring with publishers to set the price 4. Apple’s global supply chains make their business thrive. There is
of e-books that were bought using iTunes. The ongoing feud with secrecy among suppliers, superior quality standards by every party
Samsung regarding various patents keeps lingering year-by-year, and involved in Apple’s supply chains, and a total value focus that
worldwide customers are almost fanatically taking sides for or against ultimately makes the customers happy. Is this a sustainable business
Apple. There have also been allegations about the treatment of model for their global supply chains?

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