Logistics and Supply Chain Management System: Apple

Apple: Supply Chain Management System

Today, Apple is regarded not only one of the most successful, but also one of the most innovative companies in the world. The company has in the past raked in significantly higher returns than its peers, thanks to its unique approach to doing business. As a matter of fact, when it comes to supply chain management, Apple is regarded a market leader by most analysts.

Apple's Logistics and Supply Chain Management System

The company's supply chain management system could be broken into four general parts. These include, sourcing, manufacturing, warehousing, distribution and finally, return. It is important to note, from the onset, that Apple sources most of its raw materials from diverse locations -- particularly Europe, China, and the United States. The most critical raw materials for the manufacture of the company's numerous electronic devices include integrated circuits, the appropriate optical drives, microprocessors, and LCDs (Crandall, Crandall, and Chen, 2014). Some of the better known suppliers of the tech giant are "aluminum giant Alcoa (AA), chipmaker Intel (INTC), and diversified product maker 3M (MMM)" (Samson, 2013). Other equally important players in this case, as the author further points out, are Western Digital, Micron, Sandisk, and Panasonic.

The company then ships the raw materials to assembly plants in diverse locations, whereby as Samson (2013) points out, at least five continents are involved, including South America, North America, Europe, Australia, and Asia (Samson, 2013). It should, however, be noted that as Crandall, Crandall, and Chen (2014, p. 545) observe, the company largely embraces or adopts an outsourcing model, with its hardware products, as it previously pointed out in a 10-K report, being "manufactured by outsourcing partners that are located primarily in Asia." A bulk of the assembly work is undertaken or conducted in China, with all indications showing that the current CEO of the company, Mr. Cook, is likely to maintain the status quo. The company has in the recent past, according to Crandall, Crandall, and Chen (2014, p. 545), "reported assets of $2.6 billion, primarily in China, most of it in material and equipment…" This constitutes the second part of the company's supply chain management system, i.e. manufacturing.

When it comes to warehousing and distribution, it should be noted that it is after manufacturing that the various products made by the company are shipped to buyers, with those who purchase the said products from the company's online store receiving them via UPS/FedEx. However, given that there are other distribution channels involved, including but not limited to direct sales and retail stores, the company has a facility in California (Elk Grove) from where products are supplied. The facility serves as the central warehouse.

It should be noted that buyers can, at the very end of the life of the product, send back the products to any nearby recycling facility or Apple Store. This constitutes that fifth part of the company's supply management system. Products in this case could be returned on the strength of three factors: the recycle program, the trade in initiative, and the warranty return provision. In the recent past, the company has moved to reduce the time taken to issue refunds to buyers seeking to return any of the company's products like an iPhone (Farr, 2014). In the words of the author, "Apple is processing refunds at a faster rate because the company now uses an expedited service, FedEx 2 Day, to let customers ship returned items with prepaid labels to its warehouse in three days" (Farr, 2014).