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Apple Supply Chain Case Study

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Supply Chain Risks
A supply chain is a global network used to deliver products and services from raw materials to end customers in an engineered flow of information, physical distribution and cash (Blackstone, 2008). Supply chains are networks of suppliers, companies, resources, activities and technology included in the creation, production and sale of products.
Risk is the possibility of an unforeseeable event which can harm and undermine the establishment. Supply risk is the probability of an incident associated with inbound supply from individual supplier failures or the supply market occurring, in which its outcomes result in the inability of the purchasing firm to meet customers’ demands or cause threats to customer life and safety (Zsidisin, …show more content…

The six categories of risks are disruptions, delays, systems, information processing, intellectual property, procurement and weak receivables.

Apple’s Foxconn Explosion
Apple Inc once endured disruptions with one of its major suppliers in China. Apple’s supplier and manufacturer, Foxconn, suffered an explosion at the factory where iPads were manufactured. This explosion, caused by ultra-light dust, killed 3 people and injured 15 (BBC, 2011). This unfortunate occurrence immediately ceased production of the iPad2. Consequently, Apple couldn’t produce adequate iPads to satisfy the consumers’ demands. This delayed iPad shipments and caused an increase in cost of production, therefore, Apple’s pricing increased for the remaining iPads available in the market. However, Apple was at a competitive disadvantage as many loyal customers resisted purchasing the iPad2 and eventually turned to Apple’s competitors who produced inexpensive tablets. Disruptions in Apple’s supply chain adversely affected its sales subsequently decreasing revenue and overall profits. Also, this explosion interrupted Foxconn’s profits drastically, causing financial strains on the …show more content…

Supply Chain Management includes coordination and collaboration between partners, which can be suppliers, intermediaries, third party service providers and customers. Supply Chain Management integrates supply and demand management within and between companies to serve the needs of the end-customer (Council of SCM, 2017).
Supply chain risk management (SCRM) is the coordinated efforts of an organization to help identify, monitor, detect and mitigate threats to supply chain continuity and profitability ( Rouse, 2018) . Supply chain risks are the elements which causes non-performance in operations. Effective supply chain risk management is mandatory to have a successful business. An integrated and engaged leadership team can identify risks before they cause disruptions and deliver quick and systematic responses to any incidents that may transpire. Conclusively, management, reporting and proprietorship of supply-chain risk should be established by senior management. Supply chain risk management focuses on the

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In the early 2000s, The Boeing Company faced many challenges with increasing competition in the commercial aircraft market. To remain competitive, they began the development of their 787 Dreamliner aircraft using an unconventional approach in terms of supply chain management. The historical approach that Boeing used on previous aircraft designs required Boeing to procure raw materials and subassemblies from several different suppliers and manufacture the final assembly in house. Dreamliner sought out to be the first of Boeing 's kind to outsource 70 percent of its major subassemblies under a Partnering for Success initive (5) , leaving Boeing to assemble the final assembly performed in-house. Build airplanes the same way the automobile industry

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Q. 2. Recent development in Technology has enabled huge global organizations to avail information easily in their premises for smooth functioning of various departments within an organization. Much of a company's success comes down to its Supply Chain Management and logistics. The development of Information Systems in SCM helps in cost reductions, customer satisfaction and productivity.

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In this way, the sale of products in world-wide market will increase. • Increased labor costs in China could take away the cost advantage of some Apple products. • Decaying middle-class incomes in some developed countries, including the United States, could shrink the potential market for higher-end consumer goods such as those marketed by Apple. • A strong U.S. dollar could increase exchange rates, making it more expensive for Apple to do business in key markets like Europe and

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Further, the growth of the world’s economy was also very slow in 2012 and was expected to be same in 2013-14 as obvious. Apple has been affected by a crisis such as the change in American regional sales for the current year was 9% in 2012-13 compared to 50% of 2011-12, in Europe, 4% in comparison to 31% and in greater China 13% in comparison to 78% (Apple INC, 2012). The unemployment rate in U.S was 7.9 during 2012- 13, 4.1 in China and 4.6 in Japan, was one of the significant causes of the downturn in sales growth (Trading Economics, n.d). Euro crisis, U.S fiscal problems and hard landing of large developing countries will likely continue in the coming couple of years leading Apple to more toughen economic situations (IMF, 2013). Moreover, stringing dollars had also source of problem for Apple product prices, transportation cost and profit margins (Apple INC, 2012).

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