Apple's Global Supply Chain: A Case Study on Manufacturing and Sourcing iPhones, Slides of Music

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Apple Supply Chain Name Academic Institution

Author Note

Class Professor March 13, 2018

Apple Supply Chain Apple, Inc. has a broad range of product offerings for consumers. Apple creates computers, phones, tablets, and music devices. They also have a television service and media store. They are the most famous for their iPhone and people around the world flock to Apple stores to purchase these phones the day they are released. They are continually updating their products and supply. The average price for an iPhone is $687. The high prices do not lower the demand for the product. The iPhone is provided and produced by manufacturers worldwide. The iPhone goes through different levels of production and supply before it reaches consumers. Apple’s supply chain is dedicated to maintaining corporate social responsibility in production by ensuring its overseas workers are treated fairly. Apple outsources to countries around the world to meet consumer demand and establishes their supply chain. Apple’s major suppliers are located in over thirty countries worldwide. China and Japan produce the largest amount of iPhones outside of the United States. It is more cost-effective to produce iPhones overseas. China has 349 Apple manufacturers and suppliers while Japan has 139 (Barkin, 2014). China supplies the iPhone with glass screens along with creating entire models of the phone. The average amount of iPhones made in China per day is 10,000. China manufactures more iPhone than the United States. Japan supplies glass screens, inductor coils, and SD card for storage. Taiwan is becoming a competitor with China and Japan with its increase in exports and manufacturing. Apple saves money by outsourcing its production to overseas factories. Likewise, the iPhone 6 has increased the number of exports coming from Japan and China. Taiwan supplies the touch sensors on the iPhones along with the phone’s fingerprint technology. The structure of Apple’s supply chain is the reason many of its suppliers are overseas instead of in America.

Because of its supply chain model and relationship with its vendors, Apple can meet its high demand for the iPhone along with having excellent control over their products. A benefit of Apple’s supply chain model is that the company has great control of quality standards. Likewise, if one company fails to meet Apple’s supply standards, it has another company to take up the supply. Shobit Seth (2015) writes: Using its large-size and global presence, it is able to demand high quality and impose stricter terms on its suppliers. For example, when taptic engines from a Chinese supplier proved unreliable, Apple swiftly procured them from the Japanese firm Nidec Corp (mentioned earlier). Apple has hundreds of such suppliers willing to abide by the terms Apple sets forth (para. 12). Apple uses its large network to its advantage, and it can keep up with the demand for the iPhone. Additionally, Apple can concentrate on designing new features for the iPhone. Likewise, Apple’s suppliers benefit from the relationship as well. Supplies get positive brand association with being connected with Apple. Their relationship with Apple could bring them business from other companies. Their businesses will continue to grow as long as Apple comes up with new products needing supplies. However, there are some drawbacks to this supply chain model. Most of the disadvantage fall on its suppliers, not Apple itself. If a supplier fails to deliver a quality product or cannot meet Apple’s demands, that company could lose Apple’s business. Apple could give the company a bad reputation by failing to meet Apple’s expectations. There are also many risks involved in Apple’s supply chain model. If there is a global economic crisis, it can affect the production of the iPhone along with suppliers. Another drawback is that a company may only have a limited amount of resources to supply Apple. A lack of resources could halt production. Apple could suffer a delay in production is this

happened. Lastly, Apple’s supply chain could suffer from forces beyond its control and incidences “such as the natural and man-made disasters can be serious” (2013, para. 14). Apple has to prepare itself for every eventuality. While preparing for supply chain disruptive, it is also vital for Apple to maintain corporate responsibility in its supply chain. Apple continues to dedicate itself to corporate responsibility within its company and its overseas suppliers. Apple has implemented many programs to ensure that all its works are treated fairly. According to Apple, they “partner closely with suppliers to end bonded labor, underage labor, and work excessive hours. We’re also going deep within our supply chain to make sure our materials are sourced responsibly” (2016, para.1). Apple is vigilant to making sure there is no child or bonded labor within its suppliers. Another step to guaranteeing corporate responsibility is paying the workers a living wage and providing education programs. They support the promotion and education advancement of their overseas workers. Finally, Apple is devoted to being eco-friendly and sustainability. In 2015, Apple launched a “Clean Energy Program to reduce carbon emissions across our supply chain, which makes up nearly three- quarters of Apple’s total carbon footprint” (Apple, 2016, para. 2). Apple makes sure that all its suppliers have clean energy production. Additionally, Apple recycles old iPhones and components for reuse. Apple’s supply chain model is not standard in the industry, but it makes Apple, Inc a successful company. Their use and close relationship with suppliers make it possible for them to keep up with consumer demand for the iPhone. Apple can guarantee production with its extensive network of suppliers and vendors. Apple’s close control of its suppliers allows them to maintain corporate responsibility of its products. Apple’s supply chain is a winning model for all companies with its vast network of providers.