SCM 414 - Apple Case Studyguide

Where does Apple manage its creative development from?

 

United States

Where does most of Apple's manufacturing activity take place?

Asia

During the '90s, which company was a competitor to Apple's operating system?

 

Microsoft

Unlike Samsung or Nokia, Apple prefers to control the entire supply chain internally.

True

In which department did Apple invest heavily to ensure innovation? (Hint: New Product Development)

 

Research and Development

What does Apple expect from its suppliers in return for purchasing capital equipment for them?

 

Supply assurance and achieving cost targets

In 2013, which company did the analytics firm Gartner Group rank fifth for supply chain effectiveness?

Intel

In 2013, which company was responsible for the iPhone's final assembly?

Foxconn

Which supply chain feature of Apple most closely resembles that of Walmart?

 

Reverse Logistics

Why did Apple decide to pre-purchase all available holiday air-freight for its iMacs in 1998? 

 

To ensure timely holiday deliveries

When and by whom was Apple founded?

April 1, 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne (who sold his 10% stake for $800; now worth ~$95B)

Where is Apple’s headquarters located?

Cupertino, California.

Who is Apple’s current CEO?

Tim Cook.

What was Tim Cook’s background before becoming CEO?

• Worked 12 years at IBM.

• Joined Apple in 1998.

• Served as SVP of Global Operations (focused on global supply chain and product innovation).

• Reduced costs by closing Apple-owned factories/warehouses and using contract manufacturers.

Who are Apple’s main competitors in smartphones?

Samsung, Huawei, Oppo, Sony.

How does Apple differentiate itself from competitors?

Apple tightly controls its entire supply chain—from product design to sales—using its cash reserves to secure exclusive supplier deals. This enables faster, higher-quality, and more reliable product launches.

How does Apple work closely with suppliers?

By making upfront payments, buying supplier capacity, and even purchasing equipment for them.

What benefits do Apple’s suppliers get?

Access to advanced technology, upfront capital, and guaranteed high volumes.

What pressures do Apple suppliers face?

Low profit margins, strict cost control, backup inventory requirements, and last-minute order changes.

What is Apple’s make-or-buy decision strategy?

It keeps R&D in-house in California but outsources manufacturing and assembly to Asia.

How does Apple ensure quality in operations?

Through just-in-time (JIT) systems and strict quality standards.

Why does Apple limit product configurations?

To simplify production and improve efficiency

How does Apple handle global logistics?

Ships most products by air freight and pre-books air capacity during holidays to ensure delivery.

How does Apple handle local logistics?

Uses UPS and FedEx for warehousing and delivery and sometimes ships directly from suppliers to customers.

Why is reverse logistics important for Apple?

It helps with warranty claims, recycling, and customer satisfaction.

What’s the difference between backhaul and reverse logistics?

Reverse logistics serves customer satisfaction (no profit), while backhaul earns profit using owned transport on return trips.

What are Apple’s main distribution channels?

Apple Stores, online stores, direct sales, third-party retailers, and mobile network carriers.

How far in advance does Apple forecast demand?

About 150 days in advance using RFID and data systems.

What do Apple and Walmart have in common in their supply chains?

Global operations, close supplier relationships, supplier financing, and strong end-to-end visibility.

How does Apple’s supply chain differ from Walmart’s?

Apple focuses on innovation and premium retail; Walmart focuses on low prices and large stores.

How do their logistics differ?

Apple outsources logistics; Walmart owns fleets and uses a backhaul program.

How is Apple ranked in global supply chain performance?

Ranked #1 by Gartner for efficiency and innovation.

What are Apple’s main supply chain challenges?

Labor issues in China, heavy reliance on China, and political risks.

How does expanding into India and Vietnam help Apple?

Reduces dependence on China and improves supply chain stability.

Where does Apple design and where does it produce?

Designs in the U.S., manufactures and assembles mainly in Asia (e.g., Foxconn).

How does Apple manage suppliers for critical parts?

By prepaying, reserving capacity, and sometimes buying production equipment.

How does Apple ensure fast product launches?

By integrating design, engineering, and supply chain teams and planning yearly product cycles.

What are the main risks in Apple’s supply chain?

Supplier dependence, labor issues, and over-reliance on the iPhone’s success.

What are Apple’s biggest strengths in supply chain management?

Tight integration, strong cash flow, simplicity, global coordination, and speed to market.