Apple Supplier Management

Apple: Challenges of a Global Supply Chain Given the accelerating pace of its new product development and introduction cycles, success of its retail chain globally, the added requirement of greater customer-facing training, and the need to constantly innovate, Apple places a very high level of demands on it suppliers globally. Of the many elements of the company's value chain, suppliers and the supply chain are foundational the company's success (Lucas, Kang, Li, 2013).

What has been troubling about the Apple supply chain and its practices in the past has been a lack of consistency and governance regarding supplier ethics, human rights, education, safety and sustainability for preserve the environment (Lucas, Kang, Li, 2013). As Apple's Chief Compliance Officer, the need for providing greater education to all suppliers globally is a top priority.

The latest 2015 Apple Supplier Responsibility Progress Report provides a useful series of frameworks for illustrating just how quickly Apple is making strides in the area of supplier management including greater emphasis on education, reducing unethical activity, safeguarding human rights, ensuring greater health and safety throughout our global network of thousands of suppliers. All of these efforts are being galvanized around accountability and greater reliance on audits than ever before.

To ensure the greatest number of suppliers learn of these advances, a video will be made, highlighting the following areas mentioned in this analysis. Accountability and Audit Improvements Apple continues to accelerate the adoption of accountability and audit improvements across all nations our suppliers operate in today.

The experience at Foxconn has become a catalyst continued improvement and a continual shift in mindset away from pure production quality to the level of human rights compliance achieved and the ambitious goals of getting at least 400 audits completed on an annual basis at supplier locations globally (Lucas, Kang, Li, 2013). This goal was achieved for the first time in 2013, and in the video being produced, the stories of how lessons learned at Foxconn and other locations will be shown as a powerful catalyst for continual improvement (Lee, Lau, Cheng, 2013).

The video will begin with an overview of the accountability and audit results of Apple as of 2014, and provide a glimpse into the future plans for the company for this vital area. Many of the leading corporations are also integrating corporate social responsibility (CSR) programs within the context of accountability and audit studies, further galvanizing their ole as contributors to a region or nations' growth (Lee, Lau, Cheng, 2013).

One of the most valuable lessons learned from the accountability and audit initiative at Apple is how powerful it is to integrate CSR initiatives into supplier performance (Kanter, 2010). This not only motivates suppliers to compliance as they see the benefits in their own regions of being high performance Apple suppliers who excel at compliance, it also drives down the factors that cause unethical sourcing, procurement and supplier practices to begin with (Moren, 2010). This video segment will cover the following significant accomplishments attained by Apple in its supplier sourcing strategies.

In 2014, the following were all achieved: Apple performed 633 audits covering over 1.6 million workers; audited suppliers in 19 countries; calls were made to 30,000 workers to make sure their rights were being upheld; Apple reviewed 459 suppliers, and factored their responsibility performance into our decisions; Apple auditors were also on location, working together with suppliers who employed over 300,000 workers; and finally Apple conducted 633 audits in 19 countries -- the most since beginning our Supplier Responsibility initiative in 2006. The following graphic will also be shown in the video as well.

Source: 2015 Apple Supplier Responsibility Progress Report Education and Worker's Rights Training By 2014, this aspect of our supplier responsibility and CSR programs had attained a milestone of 2.3 million workers trained to implement and excel at our code of rights. Our investments in the Supplier Employee Education and Development (SEED) program have grown exponentially since its beginning. Today SEED has 48 classrooms operating in 23 different facilities, with all of them staffed and funded by Apple at no charge to suppliers.

In addition to SEED training, the video will also illustrate how 2.3 million workers located across all Apple suppliers have been trained in worker's rights programs. As of 2014, there have been 6.2 million supplier employees taught about workers' rights, including grievance and escalation procedures. In this part of the proposed video the lessons from Foxconn and other Chinese manufacturing companies (Lucas, Kang, Li, 2013) will also be provided. The following figure shows the progression of worker's rights training participation since the inception of the supplier compliance programs put into place back in 2007.

Source: 2015 Apple Supplier Responsibility Progress Report Labor & Human Rights, Health & Safety In addition to education, these four areas are where Apple is investing the most heavily today. Using a series of stories and short examples to illustrate the following significant accomplishments will make the video even more valuable for suppliers as a learning tool they can go back to and review concepts.

Apple achieved 92% compliance with the global supplier standard of a 60-hour maximum workweek, while also doubling the number of verified smelting production centers in the Apple supply chain to 135. Apple was also able to track over 1.1 million workers per average week, adding in traceability of 57 new facilities and verified compliance of 92% of all work weeks to the 60-hour maximum standard. From a health and safety standpoint, the video needs to.