Introduction
Apple Inc. is an American global corporation established in 1976 (O’Grady, 2009). The company was first established to sell Apple’s computer kit which was sold as a motherboard. In the years which followed, the company started making complete computers to compete with Microsoft and IBM in the computing industry. It has gone through various periods of failure and success to give birth to Apple Inc., one of the biggest telecommunications companies. Apple Inc. is still big in the computer products market but has today focused its efforts on the mobile telephony industry.
Apple Inc.’s core business is designing, manufacturing, and selling mobile electronics devices (O’Grady, 2009. Its success is attributed to a well-established supply chain management and an effective inventory management system. The choice of company was based on the fact that Apple Inc. has a global presence and yet, it has managed to establish and maintain a quality and effective inventory management system. The company has an integrated supply chain inter-linking its manufacturers, suppliers, small retailers, and customers. Apple Inc. has an extensive distribution network to allow it effectively reach its customers all over the globe. With a presence all over the world, the company requires very effective inventory management to ensure its customers reach its products and the business minimizes expenses associated with distribution.
Inventory management
“Despite a weakening economy in the recent times, Apple Inc. is among the few companies which have been able to maintain a fast inventory turn over rate” (Bach, 2009). Its phone products have gone global, requiring a distribution system that will reach the whole world. Inventory management is therefore not easy for a company such as Apple Inc. The business manages its inventory by well-established market research and survey system. Having up-to-date information on markets and product movement allows the company identifies which products to send, where, and when. By so doing, the business only sends the required products to a market.
By having enough market information on consumption levels and consumers’ preferences, Apple Inc. can save on the cost of returning or transferring products from one market to the other when they don’t sell in one region. It also saves Apple Inc. the cost of warehousing products that are experiencing a slow movement in a certain market. Any cost of damage or stolen inventory is minimized, as well as the cost of time spent on managing the inventory (Bach, 2009).
Apple Inc. also manages its inventories by manufacturing the right quantities of mobile electronic devices and other products. Proper inventory management requires proper variety and quantity maintenance. A good inventory management system aims to ensure that a business is not caught up in unnecessary excess stock, which increases the cost of storage and may become obsolete if it overstays in the warehouses. Apple Inc. is keen to ensure this does not happen by having proper records of what is already in the market, what is in storage, what is required, and when.
Since Apple Inc. outsources most of its production, its inventory management system has to be interlinked to the manufacturers to know how much is produced and when. Supply chain managers can advise the purchasing and sales managers on when reorders should be submitted and when they should not. They also advise the manufacturing companies on what should no longer be produced and which products need bigger volumes of production.
Markets study is an important part of Apple’s inventory management. It gives the organization an understanding of consumer trends. For example, people are likely to purchase more during the festive seasons than at any other time of the year. As a result, distributors will order more, meaning more products will be produced and transported. Understanding these trends makes it easy for Apple to adjust its production, purchasing, and selling plans, to suit the market activity at a particular period. Working closely with distributors and Apple’s phone shops allows it has an accurate supply chain since it gets information about markets from the retail shops.
Today, technology makes it possible to manage inventory more easily using inventory software. Apple Inc.’s consultants have been able to come up with software that gives it integrated inventory management and control. “Apple Inc.’s inventory management technology allows an end-to-end procure-to-pay process that gives the business a competitive advantage” (Bach, 2009). As a result, the company has an in-depth view of its suppliers and market activities. The technology also allows them a real-time update of procurement, supply, demand, and market information.
Improved and updated inventory management technology has allowed Apple Inc. manages its inventory with a clear view into costs and profitability (Bach, 2009). It has been able to significantly automate its supply chain and improve its relationships with the market, suppliers, partners, and even vendors. By improving distributors’ satisfaction and eliminating the manual inventory management system, the business can save the time of doing business which translates to minimizing costs. Most importantly, it can meet its customers’ demands effectively and efficiently.
Reference list
Bach, B. (2009). Implications of enabling technologies for Apple Inc. New York: Routledge.
O’Grady, J. (2009). Apple Inc. Westport, Conn.: Greenwood Press.