Supply Chain Management | My Assignment Tutor

An Analysis into The Quality and Supply Chain Management Processes ofAppleThis essay examines Apple Inc concerning its operational, logistical and supplychain management processes. In particular, the essay will focus on how effectivelyApple manages quality and business relationships in their supply chain. Quality is‘the ability of a product or service to meet customer needs’ (Heizer, Render andMunson,2017:255) and if not managed well can cause Apple serious global andlegal implications. The key operations will be clarified, which will define how Applegains its competitive advantage in international markets. The focus of the essay is onApple, as it is a pioneering company in technology, having created some of the mostsophisticated products for its customers around the world. Apple was founded in1976 by Steve Jobs and Steve Wozniak (Britannica, 2019) and has its headquartersin Cupertino, California (Guardian, 2019). Regarding its current financialperformance, Apple posted a quarterly revenue of $64 billion in September 2019(Apple, 2019). This is their highest quarterly revenue reached, ‘fuelled byaccelerated growth from services, wearables and iPad’ Apple, 2019). Regardingdiagrams and theories, the ‘Flow of activities’ figure will be used (Heizer, Render andMunson,2017:255) as an aid in evaluating each stage of the TQM process. Theother theories and techniques mentioned are the ISO 9001 standards, Stewart’sPDCA model, Maslow’s theory of Self Actualisation, the Six Sigma process.Furthermore, issues relating to the Triple bottom line and improvements that thecompany can make will be recommended, which will in turn, increase the reputationof the company.Total quality management concerns; ‘integrating the quality development, qualitymaintenance and quality improvement efforts’ to ‘enable production and service atthe most economical levels which allow for full customer satisfaction’ (Slack andBrandon-Jones, 2019: 605). Furthermore, international supply chains have ‘placedso much emphasis on quality that the world has united around a single qualitystandard, ISO 9000’ and the ‘Malcolm Baldridge National Quality Award’, which theUS has established for achievement in quality (Heizer, Render andMunson,2017:255).Quality, for Apple is indispensable for maintaining its prestigiousreputation in the technology industry and increasing market share against Samsung,one of their main competitors.The American society for quality states that leadership is ‘The action of leading agroup of people or an organisation, an essential part of a quality improvement effort’(American society for quality, no date). Therefore, it is consistent to say thatleadership in Apple is integral for the creation of quality, this is supported by Fig, 6.2(Heizer, Render and Munson,2017:255) where leadership is stated as a part of theorganisational practices. In 2011 when Steve Jobs was the CEO of Apple,ExxonMobil was taken over by Apple as the most highly valued company globally. Atthis point, Apple was worth $342 billion (Yu, 2013:33). Job’s impact on Apple wastransformational, creating an ‘ecosystem that allowed other entrepreneurs to thrive’((Yu, 2013:33).However, others witnessed the ‘CEO’s verbal wrath whenever theydispleased him’ (Wired, 2012). This behaviour can most definitely lead to employeedissatisfaction, making it less appealing as organisation to work in. With regards toTim Cook, the CEO has focussed on building stronger relationships with Apple’sshareholders, spending ‘$92.6 billion in dividends and buy backs’ (Fortune, 2015),paying in cash to shareholders is something Jobs discouraged. Cook has alsohandled the implications of products that did not perform well like Apple Maps(Fortune, 2015). It seems evident that through the appointment of Cook, Apple hasfocussed more on their corporate social responsibilities. Apple should continue to doso, focussing on people and profits as part of their ‘Triple bottom line’ duty towardssociety.Regarding employee empowerment, Apple ensures that its employees follow the‘APPLE’ (Forbes,2015) process in retail stores for making apologies to customers.This process allows them to approach, probe, present, listen and end (Forbes, 2015)issues with customers. Furthermore, this enables employees to follow a structureand ‘build customer loyalty’ (Forbes 2015). In stores, the language that is used byemployees is important as it to create a special experience for the customer (Forbes,2015). Apple consistently focuses on creating a unique experience for a customer,focussing on the connection that the sales representative forms with them, in turnincreasing the number of products purchased. Apple ensures that employees receivetraining and are ‘empowered to do what is right for the customer’ (Forbes, 2015).Additionally, Maslow’s theory of motivation, ‘is regarded as a fundamental approachto understanding and motivating people at work’ (Cummings, Bridgman and Ballard,2019:1). This is the idea that ‘human needs exist in a hierarchy that people strive tosatisfy progressively’ (Cummings, Bridgman and Ballard, 2019:1).This begins withthe very basic needs of humans and progresses to self -respect and self- realisation(Cummings, Bridgman and Ballard, 2019:1). Maslow’s theory supports that Appleshould continue to empower its employees, as retail stores employees will be able tomeet their KPI targets quicker.Interestingly with regards to their organisational practices (The Flow of Activities)(Heizer, Render and Munson,2017:255) Apple employs 80,000 in the US (New YorkTimes, 2016). Apple states that employees feel individuality is valued and that thereis a welcoming culture at work (Apple, no date). However, the statistics regardingdiversity and occupation related to gender are heavily skewed. From Apple’swebsite, it is evident that the majority of Apple employees are predominantly male.This is consistent throughout the organisation, from roles in leadership to retail andtechnology (Apple, no date). For example, in 2018, only 33% of employees werefemale, compared to 67% male (Apple, 2019). The figures are worst for roles intechnology and leadership. Similarly, only 9% of Apple employees are black.Nevertheless, this certainly does not reflect the diversity within Apple, as there issuch a low percentage of employees from different backgrounds. Apple should makea solid effort to be a diverse employer and recruit more women in leadership andtechnology-based roles.‘Apple has a legendary focus on the customer experience’ (Forbes, 2018). Theyhave managed to keep this experience consistent from every customer touchpoint,from their websites to their advertisements (Forbes, 2018). Over the last decade,the company has also expanded their focus onto making the apple experienceintegrated into daily life (Forbes, 2018). Focussing on creating an eco-system, whichApple has done has enabled the company to focus more on the product andexperience for the customer, in contrast to other companies that place profit overproducts. The customer, then welcomes Apple into different stages, this can be donethrough Apple pay, which allows a customer to pay from their phone or to control theelectronics of a person’s house (Forbes, 2018). Again, this is a part of the ‘Flow ofactivities’ process (Heizer, Render and Munson,2017:255). The Six Sigma process(Heizer, Render and Munson,2017:259), is a great strategy that focusses oncustomer satisfaction. Apple can use this process to continuously improve itsongoing improved service for customers. This will lead to more brand loyalty andprofitability for Apple in the future.Continuous improvement, as defined by the American Society for Quality is the‘ongoing improvement of products, services or processes through incremental andbreakthrough improvements’ (American society for quality, no date). Apple is acompany that has revolutionised the world through its technological advancements,however, the company has faced its share of hurdles whilst trying progress. The firstApple computer, made a poor impression on the public, leading to a few sales(Guardian, 2018). However, the second Apple computer, fared much better, ashaving an ‘inbuilt keyboard made a dream’ (Guardian, 2018). Replacing the secondApple computer, was a struggle for the company, however the launch of theMacintosh, having borrowed the graphic user interface from the second Applecomputer but reducing prices, proved to be a success. Furthermore, the reaction tothe first iPod in 2001 was poor from the press, as MP3 players were widely abundantat that time (Guardian, 2018). However, in 2003, Apple managed to create a successof the iPod through advertising, leading to a ‘five-fold increase in its share price overthe following five years’ (Guardian, 2018). This clearly shows that Apple hasovercome many setbacks but has relentlessly strived for perfection with theirproducts. Apple can use the PDCA model by Walter Stewhart (Heizer, Render andMunson,2017:258) for developing better products, as it will allow them to check fordefects and what could be improved in products. This stands for ‘Plan, Do, Check,Act’. Effective use of this will lead to higher customer satisfaction with products andincreased revenue gained from more sales.Supply chain management concerns ‘the management of upstream and downstreamrelationships with suppliers and customers to deliver superior customer value at lesscost to the supply chain as a whole’ (Christopher, 2016:3). One of Apple’s mostrecent products has been the sixteen-inch MacBook Pro, which Apple describes asthe ‘largest retina notebook ever’ (Apple, no date). With such state-of-the-artproducts being produced, it is essential to examine how effectively Apple managesbusinesses in their supply chain and whether they are continuing to enhance theirefforts towards their triple bottom line. Apple states they ‘care deeply about thepeople who build our products and the planet we all share’ (Apple, no date). TripleBottom Line was first coined in 1994 by John Elkington’ (Economist, 2009). Thisdescribes three bottom lines for a company, which they must consider to furtherincrease their corporate social responsibility towards society. Fig 15.1 (Christopher,2016:270), describes the impact on the environment, people and the economy, suchas climate change, human rights and poverty alleviation.Apple holds a global supply chain, with their products being made in all differentareas of the globe (Apple progress report, 2019). Apple works with a range ofsuppliers, from mining to recycling. Their sourcing strategy has been to opt for manysuppliers. This usually doesn’t allow a company to foster longer term goals (Heizer,Render and Munson,2017: 485) with a company, so it is worth analysing therelationships that Apple has with its suppliers. According to an Apple supply chainresponsibility report, the company is ‘continuously asking more of itself’, makingprogress, regarding the benchmarks used for measurement (Independent, 2018).Apple has done this by including initiatives to educate the people who work forApple’s suppliers regarding their rights and health. It is also encouraging careerprogression amongst these people (Independent, 2018). Furthermore, the companyhas developed ‘new educational programmes aimed at improving the health andwellbeing of the employees who work for its suppliers’ (Independent, 2018).However, there have been suicides at the Foxconn technology group- one of Apple’sChinese suppliers. These suppliers make products like the iPhone and iPad.Moreover, the suicides were related to the working conditions in factories (Guardian,2011). Surprisingly, there were also reports of ‘under-age workers in three of Apple’ssupplier companies’ (Guardian, 2011). Although this was eight years ago, Appleshould have done more to prevent this tragedy. As a feasible solution, the companycould also use suppliers in different countries – America or Europe where thestandards of working and regulations may be better. This may open more jobs andstronger relationships with the EU economy. Using suppliers in America may costApple less to conduct audits.Apple is also famous for being a highly vertically integrated company. Apple hasmade changes to its leadership having appointed Johny Srouji as the ‘senior vicepresident for hardware’ (Forbes, 2015). Srouji was known for being an integral partof the production of chips required for iPhones and iPads (Forbes, 2015). This newchange in leadership will allow Srouji to spend more time with Tim Cook, to furtherdevelop the production of intellectual property, therefore increasing the verticalintegration process within the company (Forbes, 2015). Apple ‘has emerged as oneof the most important chip makers in the world’ (Forbes, 2015). Many of theproducts that Apple produces are produced in house, which increases agencyefficiency in the company. This does question whether Apple can produce at a lowercost as technical efficiency is obtained when the market is used. Also, ‘Apple hasopened up a laboratory in Taiwan for developing LCD and OLED screentechnologies’ (Forbes, 2015). Apple is doing this in to produce in house and cut offthe third-party manufacturers like Samsung and LG (Forbes, 2015). Furthermore,vertical integration has allowed Apple to make ‘notable progress in improving batterylife that has plagued competitors’ (Wharton University of Pennsylvania, 2012).Through the vertical integration process, Apple has become a major competitor inthe technology industry. However, Apple should make sure they balance in houseproduction with their supply chains as ‘, Apple’s integrated approach in the PCmarket did not work to the firm’s benefit when it was battling Microsoft in the 1980sand 1990s’ (Wharton University of Pennsylvania, 2012).Apple’s performance levels with its supply chain have also been scrutinised, withBloomberg arguing that Apple has ‘lost its mojo’ (Forbes, 2017), howeverGreenpeace has praised the company for being sustainable (Forbes, 2017). Applehas outsourced more of its production to suppliers in Asia and Bloomberg hasanalysed the fall in profits of both of Apple’s major suppliers; the TaiwanSemiconductor manufacturing company and the Hon Hai Precision Industrycompany (Forbes, 2017). In both companies, profits fell in the recent months of2017. There have been problems in the production processes, creating bottlenecks(Forbes, 2017). Samsung, Apple’s main competitor, uses an organic light emittingdiode, which Apple decided to use as an alternative choice for the iPhone X (Forbes,2017). This decision has put the company’s ‘already lean supply chain underadditional strain’ (Forbes, 2017). Additionally, Samsung and Huawei, the othercompetitors of Apple, have become very skilled in developing an efficient supplychain. In order to sustain and keep brand loyalty and their share of the market, Appleshould do more to ensure top performance in their supply chain.In conclusion, there are many issues that Apple has overlooked in their Triple bottomLine. In terms of the people factor, Apple can make efforts to balance out the genderdivide in their range of roles and hire more candidates of different ethnicities andraces, including women. This will significantly improve the quality of the workplace,reflecting a more diverse organisation, which will improve its reputation as a diverseemployer. With regards to employee empowerment, Apple should continue toempower employees, as Maslow’s theory clearly supports, this will attract morepeople towards retail stores for the benefit of good customer experience. The SixSigma and PDCA processes can be used by Apple’s suppliers and whilst makingchips and other components, this can reduce defects in products and provides astrategy for excellence in products. If done so, this may lead to Apple having an evenhigher market share than Samsung and other brands, which will certainly boostprofitability through increases in revenue. In terms of their supply chain, it is excellentthat Apple has made efforts towards improving the quality of lives for those workingfor their suppliers and being more sustainable with regards to the environment.Efforts must now also be put on improving performance, this can take place throughfrequent auditing of the suppliers to make sure no malpractices occur. Furthermore,Apple should focus on building stronger relationships with their suppliers, so this maymean relocating their supplier base. It is advisable to look at countries in Europe,where the Dollar, Euro currency ratio is low, therefore costs of production arelowered and the conditions and regulations regarding work ethic are significantlybetter.Reference ListHeizer,J.,Render,B.and Munson, C.(2017) Operations Management Sustainabilityand Supply Chain Management. 12th edition. United Kingdom: Pearson EducationLimited.Levy, S./Britannica (2019) Apple Inc American Company. Available at: (Accessed: 08/12/19).Singh, M./Guardian (2019) Apple’s Spaceship HQ Valued as One Of The world’sMost Expensive Buildings. Available at: (Accessed: 16/12/19).Apple (2019) Apple Reports Fourth Quarter Results. Available at: 15/12/19).American society for quality (no date) Quality Glossary- L. Available at: (Accessed: 17/12/19).Apple (2019) Supplier Reponsibility 2019 Progress Report. UnitedStates:Apple:Available at: (Accessed: 10/12/19).Slack, N. and Brandon-Jones, A.(2019) Operations Management. 9th edition. UnitedKingdom: Pearson Education Limited.Howard Yu .(2013) Decoding Leadership: How Steve Jobs Transformed Apple toSpearhead a Technological Informal Economy. Journal of Business & Management.19(1). pp. 33-45Lashinsky, A.(2015) Apple’s Tim Cook Leads Different. Available at: (Accessed: 17/12/19).Gallo, C.(2015) How The Apple Store Creates Irrestistible Customer Experiences.Available at: (Accessed:10/12/19).Wired (2012) The Story of Steve Jobs: An Inspiration or a Cautionary Tale?.Available at: 18/12/19).Goel, V. (2016) How Apple Empowers, and Employs, the American Working Class.Available at: (Accessed: 10/12/19).Surname, Initial. /Corporate author (Year) Title of Webpage in Title Case and Italics.Available at: URL (Accessed: date).Guardian (2011) Supply Chains: Forget Mere Compliance, Build Collaboration andShared Values. Available at: (Accessed: 16/12/19).Guardian (2018) From Macs To iPods And Apps: How Apple RevolutionisedTechnology. Available at: (Accessed: 16/12/19).Christopher, M. (2016) Logistics and Supply Chain Management. 5th edn. UnitedKingdom: Pearson Education LimitedAmerican society for quality (no date) Continuous improvement. Available at: (Accessed: 18/12/19).Economist (2009) Triple Bottom Line. Available at: (Accessed:10/12/19).Independent (2018) Apple Reveals Latest Supply Chain Responsibility Report,Revealing New Details About How Iphones and Other Products are Actually Made.Available at: (Accessed: 15/12/19).Forbes (2015) Changes at Apple Hint at An Event Greater Level of VerticalIntegration. Available at: (Accessed:12/12/19).Forbes (2017) Apple’s Supply Chain Attracts Criticism for Performance But AlsoPraise for Sustainability. Available at: 15/12/19).Apple (2019) The Best For the Brightest. Available at: 10/12/19).Forbes (2018) Why Apple Is Still A Great Marketer And What You Can Learn.Available at: (Accessed: 10/12/19).Apple (no date) Different together. Available at:, T. Cummings, S. Ballard, J(2019) Who Built Maslow’s Pyramid? A Historyof the Creation of Management Studies’ Most Famous Symbol and Its Implications forManagement Education, 18(1), pp. 81. DOI: 10.5465/amle.2017.0351Wharton University of Pennsylvania (2012) Vertical Integration Works for Apple — But ItWon’t for Everyone. Available at: (Accessed:18/12/19).


Leave a Reply

Your email address will not be published.