Procurement Practices at Apple Inc

Supply Chain Management Practices at Apple, Inc. Today, Apple, Inc. (hereinafter alternatively "Apple" or "the company") is the world's largest company in terms of brand value, with nearly twice as much value at $154.1 billion compared to its nearest competitor, Google with $82.5 billion (The list, 2016). Founded in 1976 by Steven Paul Jobs, Ronald Gerald Wayne, and Stephen G. Wozniak (The list, 2016) the company is currently headquartered in Cupertino, California and remains an industry leader in the information technology sectors in which it competes (Company profile, 2016).

To determine how Apple achieved this remarkable level of success, this paper reviews the relevant literature to provide an overview of the company's procurement practices, the requisite materials involved and a description of its supply chain operations. Finally, a summary of the research and important findings concerning supply chain management practices at Apple, Inc. are provided in the conclusion.

Review and Analysis Procurement An integral part of the supply chain, procurement refers to the processes by which enterprises secure the materials they need to produce products and services (Rossetti & Dooley, 2010). The company's Web site emphasizes its commitment to secure suppliers that conform to Apple's high environmental and employment standards (Apple and procurement, 2016). For example, the company's procurement policies stipulate that: "Apple requires each of its suppliers to meet the highest standards for all goods and services. Our requirements include a commitment to rigorous quality assurance.

[S]uppliers must be committed, as we are, to ensuring the highest standards of social responsibility" (Apple and procurement, 2016, para. 3). Notwithstanding this commitment to responsible procurement practices and the company's remarkable track record of success, Apple has experienced some significant problems in this area in recent years. For instance, Noel (2014) reports that, "Apple has a long track record of supplier issues -- most specifically, its problems with Foxconn that came to light in late 2013" (p. 10).

At the time, Foxconn manufactured and assembled most of Apple's products but it became the focus of a federal investigation concerning serious violations of labor laws which resulted in charges against its executives (Noel, 2014). In order to avoid recurrences of this type with suppliers, Noel (2014) recommends that Apple improve its procurement standards and vetting process for suppliers to obtain the materials it needs for its supply chain operations as discussed below.

Materials To its credit, Apple has modeled the way for other companies with respect to material procurement by reducing waste and promoting value-added activities all along its supply chain. In this regard, Bharadwaj (2015) reports that, "Three of the primary value adding activities (inbound and outbound logistics and operations) represent the major activities in a supply chain [and] Apple [has] been at the forefront of supply chain management" (p. 100).

This achievement is even more noteworthy given the vast array of materials needed for the company's far-flung manufacturing sites and supply chain partners. Not only does Apple design, manufacture and market a wide range of products, the company also markets these products through a network of retailers, wholesalers and jobbers (Company profile, 2016), making the need for efficient supply chain operations even more important as discussed further below.

Supply chain operations One of the defining characteristics of Apple that has contributed to its success to date has been its efficient supply chain operations (Bharadwaj, 2015). The company has consistently emphasized nimbleness and flexibility in its supply chain operations in order to remain responsive to changes in consumer demand as well as innovations in technologies that can enhance the functionality of its devices (Bharadwaj, 2015).

As Bharadwaj (2015) points out, "Apple not only specializes in designing cutting edge products, but also manages its process innovation with its suppliers spread across the world" (p. 101). Because an enterprise's supply chain operations represent the foundation of its organizational capabilities and performance, Apple's investment in time and resources in achieving optimal supply chain operations have been justified by a significant return on these investments in terms of profitability.

In this regard, Bharadway (2015) concludes that, "Apple's effective management of its hardware and software suppliers has resulted in the company maintaining a lower total cost for the product which ensures higher profitability" (p. 102). Conclusion The research showed that in terms of brand value, Apple, Inc. is the.