Question

1. Review Apple's supply chain for its iPhone product. What differences set it apart from competitors?
2. What are Apple's key advantages in how it manages its supply chain operations? Support your analysis with data from the case.
3. What are the challenges that Apple faces in the future, and what are the implications for its supply chain?
4. As Jessica Grant, what recommendations would you make to the company's vice-president, Philip Dechene, and why?

Answer 1

1: Apple set itself apart with the iPhone production by keeping everything internalized, so instead of outsourcing it made sure to employ all its own controls and manufacturing abilities to keep manufacturing nearly perfect. It controlled every aspect of the supply chain and had its teams works closely with manufacturers of its components. This was to ensure apple got the final product it wanted. Apple also struck unique deals with its suppliers to ensure that it would have first grabbed at its materials and would always be able to come back for more in the event of shortages. It also only offered a few variants of its iPhones to bring down the cost of manufacturing.

2: Apple's key advantages are the way it micromanages its production. The article made it clear that for its products it goes into joint ventures with its suppliers to help produce the items apple needs. An example of this is its relationships with companies that produce the sapphire for their screens, or the laser cutting companies in which apple invests the capital upfront for them to do renovations in exchange for a slow payback and full dedication to building Apple products. This technique helps to keep them on schedule with what they are producing. Another example from the reading is shipping in which Apple would routinely buy all shipment flights around the holidays to ensure that their products would get to stores on time often bumping other companies the same chance.

3: The challenges Apple faces in the future is continued innovation of its supply chain systems and ensuring it doesn’t overspend on its manufacturing on potentially dud products. Apple also needs to continue to work on its estimates of sales because any mistakes it makes will be reflected in either not enough parts or too many which can lead to layoffs and fluctuation in its supply chain.

4: As Jessica grant, I, would be looking heavily at companies that Apple does business with and time product releases with stock prices of these companies depending on if these companies would be receiving large orders from Apple. By introducing some of these supplier companies to BXE’s portfolios they could promote growth in their money management firm. Apple stock also tends to fluctuate depending on new releases so investing a portion of their portfolios in Apple prior to product releases would also be very helpful.