Case Study : Apple Inc. Essay

1514 Words Nov 13th, 2016 7 Pages
Apple Inc. is one of the world’s most successful companies when it comes to supply chain management. In its early years, the company had difficulties estimating demand and managing inventory often leading to stock-outs. In mid 2000s Apple began working with suppliers, providing their upfront capital in return for volume commitment. This concept not only reduced the overall price per unit but was the turning point for Apple in better handling its supply chain. In conjunction with working closely with suppliers, Apple was able to keep tighter control of the supply chain by limiting the outsourcing of processes almost completely. Through its large investment in R&D, Apple was able to limit the types of configurations of products (unlike competitors) which helped to streamline the supply chain even more and making Apple highly centralized. In addition to purchasing upfront capital of suppliers, Apple would purchase capacity in advance for parts that were universal for products across firms; this ensured Apple not only the supply but also the low cost. Forecasts for products were made 150 days in advance, but any changes or updates were automatically set to suppliers to make adjustments.
While Apple still worked with retail outlets the majority of their products were shipped directly to consumers/businesses. Apple relied heavily on intermediate warehouses of shipping firms, such as FedEx and UPS, so that all their sales outlets had the products in stock for the demand that…

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