The Difference between the Supply Chain of the iPhone versus the Supply Chain of its Competitors’ Smartphones
Apple is one of the leading companies due to its cutting-edge technology and design. The company has a unique supply chain as compared to its competitors, such as Samsung. The Major Difference in Apple’s supply chain is a result of the company purchasing materials and essential components from several suppliers (Mark 3). Subsequently, the components are transported to the firm’s assembling and manufacturing point in China (Francisco et al. 3). After the assembling process, products are sold directly to the end-users via FedEx/United Parcel Service (UPS) after buying from the company’s online outlets.
The company has other supply outlets, such as retail stores where it keeps its merchandise at Elk Grove in California. When the lifespan of Apple’s product is depleted, customers are allowed to send back the used products to the nearest company’s store or other designated organizations for recycling purposes (Mark 8). On the contrary, Apple’s competitors, such as Samsung, use a vertically incorporated supply chain model, and it ramps up the volume of production, unlike Apple, which sells directly to users via its stores.
Apple’s product, unlike Dell’s, exists in a limited configuration number hence streamlining its supply chain procedures. Also, unlike its competitors, Apple uses a reverse logistic system while addressing the technical problems of its products according to customers’ feedback. Unlike other manufacturers such as Solectron, who outsource a whole manufacturing system, Apple designers operate closely with the suppliers hence facilitating mass device production (Mark 4). Therefore, Apple’s refined supply chain has enabled the company to increase its production and distribution globally.
Merits of Apple’s Supply Chain
Apple has several competitive advantages due to its sophisticated supply chain structure. The firm uses a small number of manufacturers and suppliers, hence building stronger and more meaningful rapport with its customers (Mark 4). The company enjoys significant leverage during price negotiation processes since it guarantees high-quality massive production from the components bought (O’Connor). Another vital attribute the company has from its unique supply chain model is the close monitoring of its image (Gaur et al. 4). Therefore, Apple protects the image of its products from distortion.
Apple has been ranked as a leading company due to its sustainable and effective supply chain by several evaluation organizations. From the supply chain structure, the company is able to synchronize data between its main warehouse and other stores, together with customers, resulting in an efficient operation. The synchronization of data enables the company to have cost-effective operations across its stores and warehouse (Mark 8). Since the firm outsources its manufacturing processes, there is a reduction in the manufacturing cycle time, leading to high volumes of production.
Apple’s Future Challenges
Growth comes with its predicament, and Apple will have to be more strategic in the future to remain on top of the market. The firm is famous due to its successful implementation of innovation. The company has to maintain its innovation momentum by adapting immediately to the technology. Implementing new technology comes with several challenges, and Apple should be ready to solve accompanying predicaments for it to remain on top of the market (O’Connell et al. 62). From the firm’s current stock assessment, there is an indication Apple will soon enter the super-scale sales level with the introduction of the 5G network. The company will have to manufacture 5G-enabled phones using the 5th-generation technology, hence fueling demand.
There is an expectation of the Apple company to introduce and launch its initial 5G iPhone soon. However, with the current COVID-19 pandemic, selling such expensive and modern 5G iPhones might be challenging due to different nations’ financial problems. Millions of people have lost jobs globally due to the pandemic; hence, the company will experience challenges in the supply chain (Haleem 78). Generally, Apple is currently experiencing a significant slowdown in its distribution processes from the company’s major store in China.
Choosing Investing in Vietnam
As Apple’s Chief Executive Officer (CEO), choosing Vietnam will be among the priorities due to the country’s political stability. Business thrives well in a country full of peace and a recommendable leadership structure. Vietnam is one of the leading politically stable nations in entire Southeast Asia with low existing wages (Porter 13). It is a single-party state governed by a well-dedicated Communist Party of Vietnam (CPV). The leadership style offers strategic direction by deciding and implementing major policies affecting the country.
Apple will thrive in such a political environment (GOV.UK). The regional security in relation to South China’s sea is a significant foreign policy, hence attractive to Apple due to consistent political stability. Participating in the global value chain leads to growth and development (World Development Report 90). Also, Vietnam is amongst the fastest growing country in terms of the economy globally. It is open to foreign trade, enabling Apple to grow it is business and network. Therefore, since the distribution and supply channels are effective, the company exercises full control of its products across the globe.
Policies to Make Apple Attractive in Vietnam
At Apple, clients are the main component of its stakeholder structure. Polices to safeguard customers’ interests have to be implemented by producing high-quality and affordable commodities in Vietnam’s market. While shifting to Vietnam, Apple will have to treat the customers and the people responsible for building the products with high priority (Mark 8). The company will have to hold its employees and suppliers with the highest regard and standards, protecting people within its supply chain (Apple Inc.). Therefore, the company will have to work with suppliers to ensure the outsourced materials meet the required standards.
Works Cited
Apple Inc. “Supplier Responsibility“. Apple (Vietnam), 2021. Web.
Francisco, Kristoffer, and David Swanson. “The Supply Chain Has No Clothes: Technology Adoption of Blockchain for Supply Chain Transparency.” Logistics, vol. 2, no.13, 2018, pp. 1-13.
Gaur, Jighyasu, et al. “Closed-Loop Supply Chain Configuration for New and Reconditioned Products: An Integrated Optimization Model.” Omega vol. 66, no. 3, 2017, pp. 212-223.
GOV.UK. “Overseas Business Risk: Vietnam“. GOV.UK, 2021. Web.
Haleem, Abid, et al. “Effects of COVID-19 Pandemic in Daily Life”. Current Medicine Research and Practice, vol. 10, no. 2, 2020, pp. 78-79. Medknow, Web.
Mark, Ken. APPLE INC.: Managing a Global Supply Chain. Ivey Publishing, 2021.
O’Connor, Neale. Five Lessons from Apple’s Supplier Strategy. Melbourne: Monash University 2018. Report number: 006.
O’Connell, Eoin, et al. “Challenges Associated with Implementing 5G in Manufacturing”. Telecom, vol. 1, no. 1, 2020, pp. 48-67. MDPI AG. Web.
Porter, Michael. Vietnam Competitiveness Report 2010. Central Institute for Economic Management and the Asian Competitiveness Institute, Hanoi, 2010, pp. 1-68. Web.
World Development Report. Trading for Development. World Bank Publication, Washington, 2020, pp. 1-293. Web.