SUPPLY CHAIN MANAGEMENT

Supply chain management

Supply Chain Management

Introduction

The manufacturing of Apple I Phone products are taking place in China because of the certain benefits received by them. Although, it is written on their products that Apple I Phone was designed in California but was manufactured in China. These days, it has become common for the IT Companies to outsource the manufacturing of their items in a foreign country. China is the best destination, for any foreign company, to have their products outsourced in it. The concept of outsourcing is one of the major topics of Supply Chain Management. Since it is becoming immensely popular in most of the companies, so it is necessary to understand the advantages it provides to various companies in the world. This is the reason why, the decision of Apple outsourcing its manufacturing facilities in China, and, the other aspects related to its Supply Chain Management will be discussed in detail (Chopra, 2004, 53).

Discussion

What is Supply Chain Management at Apple?

According to a report by AMR Research, Apple Inc is one of those IT companies that have best supply chain practices in the world. They were praised by the AMR because of their high innovation, proper network of demand and supply. It also mentioned the company's efficient use of vertical integration as a strategy, especially in the purchase of mobile chips to enhance the performance of mobile devices. The main reason because of which Apple Inc has achieved tremendous success in the Supply Chain operations is the efficiency in the digital and physical systems. This factor enabled them to achieve low cost in the production of items which accelerated their global dominance in the IT industry. As a result, they produced high quality products which assisted them to increase their customer base. So, it is quite clear that the Apple Inc is maintaining their Supply Chain operations remarkably well. Their financial performances are even extremely good and have a large market share across the whole world (Choi, 2006, 637).

The make or buy decision

Make or Buy is one of the most salient topics of Outsourcing. "Buy" means that the company depends on another firm to develop this activity, possibly under a contract. The same thing is happening with Apple Inc because they have outsourced the manufacturing of their products in different countries. In the case of I Phone, their manufacturing is taking place in China. The second choice that the companies have is to make or substantially manufacture products by them. While some companies have been successful in performing their own processes and support activities, others buy the latter to market experts that are referred as market firms, for example, companies specializing in marketing or distribution. Apple I Phone Inc has taken a latter decision by outsourcing their manufacturing facilities to companies in China. It has been done to achieve the benefit of low costs of production which is there because of the cheap labor. The costs reduction in the manufacturing area would enable them to keep a ...