Apple is considered the company with one of the leanest supply chain management in the world (Ross, 2020). Such success is explained by several factors, including strong relationships with suppliers, strategic inventory management, and a focus on sustainability. As for the former, it is mentioned that Apple has strict standards towards its partners in terms of product quality. Additionally, the company keeps as little inventory in its warehouses as possible. Such a strategy is explained by the fast changes that occur in the world of technology. For instance, the introduction of a new smartphone model to the market by competitors can significantly reduce the prices of the products that were already stored. Therefore, the fast rotation of inventory would partly mitigate these types of risks. Finally, the organization is quite conscious of the potential and real environmental impact of its activities. For this reason, Apple strives to achieve sustainability throughout its supply chain and promote the usage of renewable production materials.
Despite the fact that Apple is regarded as one of the best companies from the perspective of supply chain management, there are some improvements that could be made to achieve greater customer satisfaction. For instance, the company can partly abandon the strategy of fast inventory rotation. Instead, it can store some number of products for a longer period of time. This will help mitigate the risks of delays in the supply process due to various economic and political factors, such as the recent outbreak of the COVID-19 pandemic, for instance. However, such a strategy would eventually increase Apple’s storage costs and the risks of the price change discussed above. Another strategy would include supplier diversification across various countries. Of now, most of the business’ suppliers are located in China, which increases the risks of supply chain disruption. Still, such a decision would be associated with increased costs and, in addition, with the surge in supply chain management complexity. Finally, the company may purchase the ‘anticipatory shipping’ solution from Amazon (Gupta, 2019). Although it will again lead to additional costs, the delivery time will reduce significantly.
References
Gupta, P. (2019). Amazon wants to send your order even before you place it; Jeff Bezos’ firm working on this tech. Financial Express. Web.
Ross, L. (2020). How the Apple supply chain stays top ranked in the world. Thomas. Web.