Question

Recommend one approach that Apple can take to lower the direct labor costs of technology products while remaining competitive with global markets. Provide a rationale for your recommended approach.

Answer 1

The Following are the few techniques that are used to Evaluate and Reduce the Direct Labor Costing in the Technology Industry.

As we know that the Technology Industry is very vulnerable in nature. Any new technology or innovation can swapt the market. This needs continuous Research and Development which involves huge costs. Thus, a market Giant like Apple can use following approaches to reduce its Direct Labor Expenses :

1. Review Levels of Compensation : Continuously review the market competitors, their technology, etc. to understand company competitors.

2. Reduce Employee Turnover : Its the Good and loyal employees which builds the company in market. Employees are the main asset of any Technology based Company. The cost in training and teaching skills and knowledge to people is really costly, thus, company should focus on reasons why good productive employees are leaving or may leave the company and counter that to reduce Labor Turnover Cost.

3. Cross-Train Employees : A workforce trained to do variety of tasks will less affect the organization on labor turnover, dependency on specific people for special tasks. Thus, company should train employees in performing more than one operation.

4. Convert Fixed Salaries and Wages Into Commissions or Fees : It is the best way to make effective and efficient workforce. Because the salaries and wages are based on the standardize performance, employees become more productive. There is an opportunity to earn more by performing good, thus, it can motivate the employees.

5. Eliminate Redundancy Between Departments : As big companies like Apple, have various departments to operate. Thus, many times it become time consuming to co-ordinate, co-operate and perform tasks in effective way because many decision makers are involved in the process. The management should look into matter and eliminate unnecessary supervisory departments and procedures to become more Speedy.

6. Automate and Outsource Non-Critical Tasks : Many countries offer cheap and quality labor. Plus, their Laws are more flexible while working in industry which involves less cost. It is always suggested that the non-technical, non-confidential, and any possible work if available on cheaper rate can be Outsource to reduce the costs. Many times in Licensing company can offer outsource company to produce Top Technological Equipment through technology transfer on cheaper rates.

The above are the Important Approaches which leads in reduction of Direct Labor Costs of Apple inc.