Abstract
In the current competitive business environment, companies are interested in ensuring that they streamline their operations to lower the production costs and increase profitability. Apple Inc. is one of the firms, which have registered impressive success in the market over the recent past. One of the areas that this firm has registered success is in cargo security management. In this paper, the focus was to investigate how cargo security management is done within the company. The investigation reveals that this firm uses an elaborate program of managing the security of its cargo from the production plant in China to the markets in the United States and the rest of the world. Currently, the firm is using FedEx Boeing 777s with enhanced security features to transport its products to the market.
Introduction
Apple Inc. is one of the leading electronic companies in the world. Its brand has been ranked the most valuable globally for the past half-decade. The company moved its operations to China, but the United States remains its most lucrative market not only because of the high purchasing power but also because of the popularity of the brand over that of rival products. The process of moving iPhones, iPads, Macintosh computers, iPods, and other products from the manufacturing plants in China to the global market is a highly sophisticated process (Yuen, 2015). The company has been focused on ensuring that the products are moved to the United States without attracting the attention of the public. In fact, Jung, Baek, and Lee (2012) say that sometimes it is not easy for American customers to know that these products are manufactured outside the country. Logistics and other operational activities are done so efficiently that the company always ensures that the exact amount of products needed in the market is always available at all times. One of the key areas that the company takes interest in during such logistical processes is cargo security management. In this paper, the researcher will look at how cargo security management is done within Apple Inc.
Literature Review
According to Tseng, Tang, and Morris (2016), Apple Inc. decided to move its production plant to China as one of its strategies to increase profit margin. The firm was struggling with the rising cost of production in the United States, and it was not easy competing against its archrival, Samsung, that enjoyed a low cost of production enabling it to charge relatively low prices. The management had to find a way of lowering production costs significantly to enable this company to compete favorably in the market against its existing and emerging market competitors. The move to China was a success in terms of lowering the cost of production for the company. However, there were other new challenges that emerged, and the management of this company had to find ways of dealing with them (Deen, 2016). The first challenge was the image of the company in the United States, which remains its single most important market in the world. Moving its production plant to China meant that many Americans lost their jobs. The company wanted to ensure that the Americans are not constantly reminded that the production plant was moved to China. It meant that the process of moving the products had to remain a secret.
The second challenge that the company faced was the need to ensure that the products of the company arrived in the global market in time and the right quantity and quality (Donohoe, McGill, & Outslay, 2012). During the launch of every new product of the company, there is always a huge sale. The experience of these initial customers often defines the success of such products in the market. As such, the company has always committed to ensuring that the products arrive at the market with no delay and with all the components to avoid any customer complaints. Given that the company always wishes to maintain secrecy during such operations, the shipping of these products is not always an easy process (Backer, 2013). The company has to engage some of the top logistical companies that can assure it of the safe delivery of its products in the local and global markets.
The third challenge that the management of Apple Inc. has to deal with in its operational activities is managing cargo security during the movement from the production plant to the global market. According to Yuen (2015), cargo security management is always twofold. First, the firm has to ensure that the products are shipped safely without any threat of damage or theft. Margulies (2017) observes that Apple Inc. often uses Boeing 777s when transporting the products. The plane can carry over 450,000 iPhones. The current average cost of an iPhone is about $ 700. It means that if the cargo in a single plane is stolen or destroyed, then the company will lose about $ 315 million. The company has put in place measures to ensure that these products are always safe from possible theft or destruction during the entire process of transportation (Deen, 2016). The other aspect of security is information management. The company has always remained committed to ensuring that its products are available in the market as promised. However, to enhance the physical security of its products and to hide the fact that the products are manufactured in China, the company has always maintained secrecy during the shipment of the products (Backer, 2013). The company always ensures that only specific individuals are aware of the entire process of shipping the product.
According to Yuen (2015), Apple Inc. has one of the sophisticated systems of managing the security of its cargo. The company has a highly efficient system of monitoring the movement of its products from the manufacturing plant to the destined markets in the United States and other parts of the global market. The ability to monitor the physical movement of the cargo through state-of-the-art technologies enhances its security and planning. The logistics and marketing department can easily coordinate, knowing when the products will arrive in the market. Margulies (2017) says that the company often hire the services of various security companies both locally and globally to ensure that its products are safe throughout the entire process of delivering them to the specialty shops across the world. The security of the cargo is often enhanced through efficient communication among the stakeholders involved in the process. To enhance the physical security of the cargo and to reduce the cost of warehousing, the marketing department often conducts a market survey to have an accurate forecast of the market demand.
The goal of the forecast is to ensure that the products shipped into the market meets the demand in the best way possible without the company having to store so many products for so long because of overproduction and excess shipment of the products into the market (Backer, 2013). Through such an efficient system, there is always a consistent flow of products into the market based on market demand. By reducing the rate at which the products are handled in the warehouse, the company eliminates frequent cases of product damage and loss. It also reduces the cost of warehousing significantly. The strategies have enabled Apple Inc. to reduce the cost of operations in the global market (Deen, 2016). The move has helped the firm to increase its revenues and profits in the competitive electronics market.
Discussion
In the current business environment, Apple Inc. faces numerous challenges in the market, some of which include a possible terror attack, theft of the products, malicious destruction, or accidents that may hinder it from making timely delivery of its products to the market. However, the company has never failed to deliver its products to the market as promised. When launching new products, especially the iPhone, there is always a huge demand in the United States and across the world (Deen, 2016). The firm has successfully managed to overcome various challenges in the market to deliver its products in the right quality, quantity, and at the right time. It is important to conduct further investigation to determine how it has succeeded in such a challenging process.
Managing Physical Security of the Products and Information
According to Margulies (2017), Apple Inc. has been focused on ensuring that its products are transported to the market efficiently and safely. For a long time, the company was using decommissioned Russian military planes to transport the iPhones and other electronic products from the production plant to the market. The decision to use these Russian military planes in transporting the products was informed by various factors (Deen, 2016). First, these planes have the right security features that Apple Inc. needed to help it monitor the movement of its products in the market. The logistics manager could easily communicate with the employees on board and understand the state of affairs during the transport of the cargo. Secondly, they are designed to withstand extreme conditions and possible minor attacks that may be tempted by criminal gangs or terror groups. The fact that these were military planes also discouraged criminals from attempting to steal the cargo or interfere with it in any way during the stopovers. As such, the planes offered maximum security possible.
Currently, the company is using the services of FedEx to transport its products from China to the United States and the global market. The decision to use FedEx was made after this logistics company acquired Boeing 777s that could make direct flights from China to the United States. To enhance the physical security of the cargo, Apple Inc. has been working closely with FedEx to ensure that security experts are involved in the process of transportation. Once the products reach the company’s headquarters at Cupertino, California, the United States, an elaborate and secure logistics system is unrolled to facilitate the distribution into the entire country. To enhance its policy of secrecy when distributing its products to the market, Apple does not use its trucks or vans. These services are outsourced from local logistics companies. The approach also helps the company to have more time to focus on the design and development of new products instead of spending on issues related to transportation. However, it is always involved in ensuring the safety and security of these products at every stage of transportation. Yuen (2015) also notes that the security management approach embraced by Apple Inc. has been successful because of the information management system at the firm. It is not easy for anyone to predict when or how the products will be delivered to the market other than the firm’s top management unit and people directly involved in the logistics.
Impact of the Cargo Security Management
The approach that Apple Inc. uses in managing cargo security has had a significant impact on the firm. According to Margulies (2017), the brand of this company has been voted the most valuable one in the world for five consecutive years. It is a sign that this company has excelled in meeting and sometimes exceeding the expectations of its customers in the global market. One of the reasons why the brand has achieved such levels of success is the company’s efficiency in its logistical system. The company is yet to report a major breach in its security system when delivering its products into the market. The process is very challenging, but the company has registered success over the years. Besides the strong brand in the market that has been created by the security management system, the company has also enjoyed increased revenues in its operations.
The company’s ability to deliver its products in the market in a timely and effective manner has increased sales of its products. The sales are always high in the initial days of introducing a new product in the market. Apple Inc has also registered improved profits because of the efficient system that it has put in place to manage the security of its cargo. Although it is costly to create and maintain such elaborate security systems, the risks averted by such systems lead to great benefits for the company than would be the case if the company avoided the security systems. Currently, Apple Inc. is one of the most successful companies of the 21st century, partly because of its comprehensive system of cargo security management. The company is also coming up with new trends in cargo security management to help in improving the safety of its transit products.
Conclusion
Apple Inc. is one leading electronics companies on the global market. The company has maintained a very strong brand in the global market because of its unique ability to meet the demands of its customers. One of the areas that the company has registered success is cargo security management. Apple Inc. manufactures its products in China, although the design is done in the United States. Once manufactured, the products have to be shipped to the United States and to the global market in an efficient manner. The company has been using various mechanisms to ensure that its cargo is safe at all times. At one point, the company used decommissioned Russian military planes when transporting these products to enhance the security of its cargo. Currently, it is using FedEx’s Boeing 777s with enhanced security features to transport the products to the local and global markets.
References
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