The Application Of Operations Management In Apple Company

Introduction to Apple Company

Apple company is an American multinational company that was started in 1976 by three entrepreneurs known as Ronald Wayne, Steve Wozniak, and Steve Jobs. Its headquarters are located in California, United States. Although the company started venturing in consumer electronics, it has now majored in software and online services The company has more than 518 retails store globally and has employed more than 154,000 employees according to 2021 company’s statistics(Apple.com,2019). It is one of the greatest companies in the consumer electronics worldwide with total revenue of US$ 366 billion as in 2021(Lan,2021).

Apple is a good example of international company that has elegance design and technology innovation that is consistent for a long time which is evident in its sophisticated revolutionary launches. These traits are supported by the company’s mission and vision statements which are source of motivation to its employees and gives the company competitive advantage through groundbreaking innovations. This report therefore would like to discuss how principles of operations management are applied by Apple company to make it successful in the global industry(Aljafari,2016).

2.1 How Operation Management Contributes to Apple’s Strategy

Operations management refers to administering business practices to achieve optimum efficiency that is attainable within the company(Yan,2018). It deals with conversion of raw materials and labor into finished products with highest efficiency as possible to achieve maximum profit for the organization. Operations management enables an organization to achieve highest profit that is attainable through balancing costs with revenue(Oakland,2012). It deals with the use of resources such as technology, equipment, materials and staff. Managers in this area deal with acquiring, developing, and delivering goods to customers based on their needs and abilities of the company (Barnes, 2018). Apple company operations management comprises of 10 decisions of OM to facilitate efficiency in all of its activities. The concept of 10 decisions in operations management is associated with aspects like inventory management, location strategy, process and capacity design, quality management, product design, and other operational activities (Krajewski et al,2015). In the Apple company, the operations management’s 10 decisions are cautiously applied through coordination in organization’s supply chain, sales and marketing, product design and development, alongside other firm’s business areas. By having conspicuous leadership in digital content and computer technology industries, Apple is a good example of successful enterprise that has implemented 10 decisions of operations management effectively(Dudharejia,2018). The effectiveness of operations and strategies encompassing innovation in technology has assisted the company to do well despite competition from Walmart, Samsung, Amazon, Google, Sony, Microsoft, Lenovo, Dell, and other corporations(Haselton,2017).

The design of Apple’s products is dealt by various organizational officials and components. For instance, the making pf Macs comprises of senior VP for Mac software engineer and senior VP for Mac hardware engineer. This team work depicts the features and kind of organizational culture of Apple company. In decision making regarding this area, the two VPs work together with VP for operations management to ensure that the company makes outstanding products with excellent designs in Mac production (Johnson et al,2012).

This area ensures that their quality standards and control of goods and services made by an organization. The senior VP for Apple’s operations work together with other 8 senior VPs to enhance adherence to the company’s quality standards (Montgomerie & Roscoe,2013). Apple is well known for high quality that are evident in various aspects of its operations such as human resource management, industrial design, online sales, marketing, retail, and product design and development(Haselton,2017). Therefore, this company has a strategic mechanism to ensure quality control in operations management.

How Operation Management Contributes to Apple’s Strategy

The human resource directorate of Apple company uses approaches like support for maximizing workforce capacity for product design and development. Furthermore, the corporation engages with suppliers enhance sufficient capacity and efficient processes in this area. For instance, Apple ensures that its supplier is familiar with code of conducts of suppliers and process design to maximize engagement with human resource management. In addition, the company invest more in innovation in order to optimize process efficiency and capacities in its facilities (Morgan & Nicole,2021).

Apple uses selective location strategy which has a few number of authorized dealers. However, these dealers are suited in urban areas to optimize brand awareness and foot traffic. Currently, the company has close to 600 retail outlets in more than 20 countries across the world. Despite selective location strategy, Apple is the most profitable company globally(Shanklin,2017).

The layout design and design of Apple focuses needs of clients. For instance, its authorized dealer’s stores are more spacious with very few decorations to enhance focus on company’s products. In other areas of the firm are designed with innovative office layouts which promote efficiency and creativity in workflows(Aljafari,2016).

This area needs human resource and job design approaches that are congruent with trends of needs in Human resource management. For apple, these approaches are inclined on its first CEO Steve Job vision for excellence. Currently the company under Tim Cook is shifting these approaches to deal more with sociable workplace boost employees’ morale. Neverthess, all these approaches have enabled the company to maintain industrial leadership (Dolata, 2017).

Apple is among the most reputable companies with efficient and effective supply chain globally. The company regularly monitors its suppliers and has automated its processes. The monitoring enhances evaluation of capacity and productivity of suppliers together adherence to the company’s supplier code of conduct (Green, 2015).

Apple uses various inventory management methods like serialized tactic to ensure tracking and products control are more effective. The company used FIFO method that ensures old stock is sold first before releasing new products into the markets(Lockamy,2017).

Scheduling in Apple company is done through combination of manual and automation processes. Manual scheduling is done in some areas of company’s offices and individual Apple Stores while automation scheduling is done in production and supply chain processes. This firm uses scheduling as means of maximizing utilization of human resources, equipment and facilities (Marshall et al,2016).

The maintenance aspects of operations management in Apple company is enhanced through dedicated teams of experts. For instance, every department has its own maintenance team for its facilities (Montgomerie & Roscoe,2013).

Quality management is a practice of ensuring various tasks and activities in an organization to enhance consistency in the good and services produced and all processes involved in the production. It assists to attain and sustain level of quality desired in the organization (Satariano & Burrows,2017). Quality management comprises of four cardinal areas which are:

(i)Quality Planning which involves identification of quality standards that have importance to a project and how they will be achieved (Oakland,2012).

The Concept of 10 Decisions in Operations Management at Apple

(ii) quality improvement which consists of developing a purposeful change in the operations to boost the confidence or reliability of outputs (Ebrahimi & Sadeghi, 2013).

(iii) Quality control which entails continuous endeavor to maintain integrity in the process and reliability in the results (Siva et al,2016).

(iv) Quality assurance which refers to planned or systematic steps that are crucial in offering adequate reliability in order to achieve specified requirements for a particular product or service (Goetsch &Davis, 2014).

The objective of quality management is to make sure that all stakeholders in an organization work as team to improve the organization’s culture, services, products, and processes to attain long-term success that is rooted from satisfaction of customers. The quality management process involves a team that draws guidelines that will ensure goods and services offered meet the right standards or suit the desired purpose. The process commences when the team develop quality targets to be achieved and are accepted by clients. The organization then outlines how these targets will be measured, implement steps to measure these targets, and then recognizes any challenge and triggers improvements. The final step is to report the entire quality level obtained. The entire process is meant to ensure goods and services offered by the organization meets match the expectations of customers (Weckenmann et al,2015).

Apple company has used quality management in its operations which has brought success in the corporation. It has used different quality management tools and techniques to make sure that it offers high quality products and services. The SPC Charts and Flow charts are good example quality management tools and techniques that Apple has embraced in its operations.

A flow chart is a visual description that shows a logarithm or a process. The small boxes capture the process while the connection between one element and another is indicated by an arrow. These visual illustrations help to identify specific problem and offer a solution to it (Silombela et al,2018). Apple company utilizes flow charts in analyzing, designing, documentation and management of difference processes in the organization. For efficient use of these charts, the company bring together causes and effects as it makes easier identification of areas for measuring quality performance. It also uses them to identify the current situation of the company and future expectations of the organization. By doing this, the employees have a good chance to fathom and identify areas which need to be changed (Oakland, 2012).

The team obligated with implementing new projects in the organization also utilize flowcharts to comprehend the processes and makes changes where needed. As orientation process, the company start by using those employees with more experience and then introduce those with less experience. The use of flow charts hence allows the less experience employee to perform various processes in the organization. These illustrations are also used when the company is introducing new products in the market and help in solving problems (Webber, 2012).

Use of flow charts in quality management sometimes is hectic and cumbersome. It requires a lot of expertise to narrow down the complex information so that it can be captured in the flow charts. This compression of information may leave certain information that may cause a great impact in a specific process in the organization (Ismyrlis &Moschidis,2015). Moreover, it is sometimes difficult to interpret information on flow charts with the help of the designer. This causes problem to employees to understand the process as they ought to be on their own. It is therefore important for Apple to address this issues in order to maintain quality (Satariano & Burrows,2017).

Examples of Effective Implementation of Operations Management at Apple

Statistical Price Control (SPC) is statistical methods used for monitoring and controlling a specific process. It assists in ensuring that the processes operate within the expectations while making products that meet outlined specifications.SPC makes sure that processes provide outputs that meet quality standards with no waste. This tool is commonly used in manufacturing companies but it is also used in organizations where their outputs can be measured (Silombela et al,2018). One of the common SPC tool is control charts which help to determine if a manufacturing process or business is in statistical control.

Apple company utilizes control charts to determine whether a specific process is under control. The data enables the organization to speculate expected outcome. When the firm got that the process has deviated from the expectations, the firm respond by conducting control charts analysis to determine the sources of the variation (Zhongming et al,2021). This helps to retract the process to be in control through carrying out relevant changes.

Apple corporation also uses control charts to conduct quality awareness for a purpose of preventing production of poor quality products which do not meet customer’s expectations (Green, 2015). The company puts more attention of new products development to maintain competitiveness and promote demand on customers. The firm also takes measures to improve the existing products and services. All these is due to the fact that consumer behavior keeps changing (Pramono et al,2018). A company achieves success if it introduces products in the market on time.SPC charts do help a firm to reduces risks associated with defects when bringing new products in the market. These charts can help to identify the defects that may compromise quality of products and are rectified before releasing products to the market (Sharma et al,2020). In order to reduces these risks, the Apple company ensures that it engages consumers.

The use of SPC charts however, has limitations in application. It does not show the number of products that have not met the expectations. It does not also indicate magnitude or direction of the corrections to be made (Sharma et al,2020). It is therefore important for Apple company to complement with other quality management tools to bridge these gaps.

Supply chain management refers to handling of the whole production process from sourcing of raw materials for production to delivery of finished goods and services to customers. It encompasses focusing on supply part of operations in a firm with aim of optimizing customer value and achieving competitive advantage in the market (Craighead et al,2020). A company that has streamlined supply chain is capable of cutting excessive costs and also delivering goods and services to clients faster. A good supply chain management also assists an organization to avoid lawsuits, recalls, and from appearing on news headlines (Wieland, 2021). A supply chain manager is required to control, and reduce costs and avoid supply shortages. This is made possible by exerting more control on inventories of firm vendors, sales, distribution, internal production, and internal inventories (Min et al,2019). There are five key areas in supply chain management which include making a strategy, getting raw materials, production, distribution, and returns.

The Role of Human Resource Management in Operations Management at Apple

Apple Company is most reputable corporation with best supply chain management across the world. In this area, it is known as innovative leader, giving motivation for other firms and exerting pressure on competitors either to keep up or lag behind (Johnson et al,2012)

(i) Strong Supplier Relationship

Suppliers are very important stakeholders in a firm as they determine production and delivery efficiency. Timely delivery of source of raw materials enhances consistent production and ultimately delivery of finished goods and services to customers faster. A company that also good relationship with suppliers is likely to source raw materials relatively lower prices which translate to lower cost of production and finally cheaper goods and services hence gaining competitive advantage over competitors (Min et al,2019).

Apple company has maintained stronger relationship with its supply chain stakeholders hence enabling the firm to have great flexibility to meet demand when it arises. This flexibility together with voluminous production capacity, allows Apple to offer goods and services when and where they are needed by the customers (Aljafari, 2016). Another issue is that Apple has put strict conditions on its suppliers which are annually reviewed in the company’s supplier list. The 98% of Apple’s procurement is occupied by top 200 suppliers in the list (Dolata, 2017). The demand of high quality services from suppliers ensures that this firm produces product that are of high quality, reliable and long-lasting.

Since Apple is a consistent innovator, its suppliers are able to obtain a certain level of stability(Lan,2021). For instance, if a certain product of the firm suffers from drawbacks or fails to succeed, the suppliers are less worried as request for another product on the same line is likely to come up. Another issue is that the needs in marketing more often and in that case the suppliers need to be aware of it. Due to ever changing market, Apple ensures that its suppliers have skills and knowledge to meet the current situation in the market. It does this by offering educational training opportunities to its suppliers. For example, more than 3.6 million employees from its suppliers have benefited from these programs since 2008(Zhongming et al,2021).

Apple company uses long-term deals with its key suppliers in order to maintain them. It uses pre-payments strategy to negotiate for favorable prices terms, to acquire strategic materials, and guaranteed massive production (Marshall et al,2016). Another element of Apple supply chain is that it uses several suppliers for the same components needed in its production. There are several benefits for having several suppliers for the same components which include: the firm is able to obtain lower supply costs as suppliers compete for an opportunity, reduces supply delays and disruption hence maintaining gross profit margin of the firm, among others (Montgomerie &Roscoe,2013.

It is imperative to note that establishing stronger relationships with suppliers can be more expensive and cumbersome for small businesses. Furthermore, one would think that Apple company having proven good relationships with its suppliers, it would sell products at lower prices than its competitors(Haselton,2017). However, this is not the case and therefore the company need to revisit the premium price of its products.

Apple’s Approach to Location Strategy, Layout Design, and Job Design

The current CEO of Apple, Tim Cook is more focused on inventory and entire supply chain. The issue of inventory management is very essential in technology industry as release of a new product may remove user’s interest on old models. Cook view inventory as evil in this industry and hold that a company that has inventory that is outdated show that the company has a big problem (Johnson et al,2012). Since Apple has little inventory, they have high flexibility in case its competitors release a new product reducing the value of products in the stock. In addition, the company has few SKUs to keep track of customers’ needs allowing more chance for forecasting(Dudharejia,2018).

The tactics of Apple’s CEO on reducing the number of warehouses and suppliers, and holding suppliers accountable on their quotes as inventory tracking mechanisms, has enabled the company to enjoy competitive advantage in the industry(Aljafari,2016).

As indicated earlier, Apple company has invested in three industries namely Information Technology and electronic industries. There are several trend associated with each industry and will be discussed individually.

Apple company has invested in information technology industry by engaging in soft development and offering online services. Software is a set of rules that allows services to run on a physical device(Earl,2018). The software is part of computer programming and consist of software developers and software users. Some of software are produced for commercial purposes while others are used for in-house production (Peslak, 2018) New trends are coming up annually in the information technology and it is therefore for investors in this industry to be aware.

Various companies have identified the need to a central position where all digital information and resources are stored and protected. It has helped organizations to have better coordination of information especially to the multinational organizations that have numerous outlets across the world (Peslak, 2018). The Apple company is utilizing this trend to coordinate its retail outlets located in more than 20 countries.

Different organizations have realized the need to develop corporate mobile apps that helps to reach their customers installable in their smart phones(Earl,2018). Apple has not been left behind as it has developed Apple Apps Store.

Automation is current trade in manufacturing and production areas and is predicted to expand in future. It substitutes manual operations hence hasten processes and enhances efficiency in an organization (Reddy et al,2014). Apple company has automated most of operations like in supply chain and production hence achieving efficiency and consistent outputs.

The artificial intelligence has become a new trend in every sector. It has impacted on semiconductor growth into two ways: promoting product manufacturing and process designs, and creating demand on artificial intelligence capable electronics elements (Quinn & Dala, 2017). The conventional ways have restrictions on minimizing defects, boosting product design processes, restructuring product development cycles. However, the AI is providing solutions to these restrictions. The utilization of predictive maintenance in the manufacturing gives producers to minimize downtime(Sass,2015). Therefore, AI is the most essential trend in the electronic industry as manifested in Apple company.

Efficient and Effective Supply Chain Management at Apple

The 3D printing technology has removed in electronic production has removed the necessity of flat circuit boards. It has brought new innovative shapes and designs that could not be achieved through conventional methods (Matallana et al,2019). This technology has also enabled fabrication of electronic elements as single, continuous portions, creating whole electronic products that are effective and need very little or no assembly (Vera-Tasama et al,2019). The 3D Printing has brought decentralized systems production, provide mass production, hasten prototyping. The Apple company has been on forefront of using 3D printing in prototyping and mass production as it acquired patent rights to use this technology in 2018(Lee et al,2019).

5.0 Conclusion

A company that has invested more in operations management has more chances of successful than those who do not. It is very important for any company’s executives to applying principles of operations management in their business venture if they want to remain competitive advantage. Apple is one of the multinational companies that has shown that adhering to principles of operations management can make a company successful and have global recognition.

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