case study on apple supply chain

1.  DHRUV PATEL (11BIE024)
 HARDIK MEHTA (11BIE037)
 MALAV BHATT (11BIE056)

2.  Supply Chain is also referred to as the
logistics network
 Supply chain comprises of :
◦ Suppliers, manufacturers, warehouses, distribution
centers and retail outlets – “facilities”
◦ Raw materials
◦ Work-in-process (WIP) inventory
◦ Finished products
that flow between the facilities

3. Suppliers Manufacturers Warehouses &
Distribution Centers
Customers
Material Costs
Transportation
Costs
Transportation
Costs
Transportation
CostsInventory CostsManufacturing Costs

4. Suppliers Manufacturers Warehouses &
Distribution Centers
Customers
Material Costs
Transportation
Costs
Transportation
Costs Transportation
CostsInventory CostsManufacturing Costs
Plan Source Make Deliver Buy

5.  A set of approaches used to efficiently integrate
◦ Suppliers
◦ Manufacturers
◦ Warehouses
◦ Distribution centers
 So that the product is produced and distributed
◦ In the right quantities
◦ To the right locations
◦ And at the right time
 System-wide costs are minimized and
 Service level requirements are satisfied

6.  1960’s - Inventory Management Focus, Cost
Control
 1970’s - MRP & BOM - Operations Planning
 1980’s - MRPII, JIT - Materials Management,
Logistics
 1990’s - SCM - ERP - “Integrated”
Purchasing, Financials, Manufacturing, Order
Entry
 2000’s - Optimized “Value Network” with
Real-Time Decision Support; Synchronized &
Collaborative Extended Network

7.  Uncertainty is inherent to every supply chain
◦ Travel times
◦ Breakdowns of machines and vehicles
◦ Weather
◦ Local politics, labor conditions, border issues
 The complexity of the problem to globally optimize a supply
chain is significant
◦ Minimize internal costs
◦ Minimize uncertainty
◦ Deal with remaining uncertainty

8.  Forecasts are never right
◦ Very unlikely that actual demand will exactly equal forecast
demand
 The longer the forecast , the worse the forecast
◦ A forecast for a year from now will never be as accurate as a
forecast for 3 months from now
 Aggregate forecasts are more accurate

9. Purchasing Manufacturing Distribution
Customer Service/
Sales
Few change-
overs
Stable
schedules
Long run
lengths
High inventories
High service
levels
Regional stocks
SOURCE MAKE DELIVER SELL
Low pur-
chase price
Multiple
vendors
Low invent-
ories
Low trans-
portation

10.  STRATEGY- Make to Stock
◦ WHEN TO CHOOSE- standardized products,
relatively predictable demand
◦ BENEFITS - Low manufacturing costs; meet
customer demands quickly
 STRATEGY- Make to Order
◦ WHEN TO CHOOSE- customized products, many
variations
◦ BENEFITS - Customization; reduced inventory;
improved service levels

11.  STRATEGY- Configure to Order
◦ WHEN TO CHOOSE- many variations on finished
product; infrequent demand
◦ BENEFITS - Low inventory levels; wide range of
product offerings; simplified planning
 STRATEGY- Engineer to Order
◦ WHEN TO CHOOSE- complex products, unique
customer specifications
◦ BENEFITS - Enables response to specific customer
requirements

12.  Delivery Performance
◦ 16%-28% Improvement
 Inventory Reduction
◦ 25%-60% Improvement
 Fulfillment Cycle Time
◦ 30%-50% Improvement
 Forecast Accuracy
◦ 25%-80% Improvement

13.  Overall Productivity
◦ 10%-16% Improvement
 Lower Supply-Chain Costs
◦ 25%-50% Improvement
 Fill Rates
◦ 20%-30% Improvement
 Improved Capacity Realization
◦ 10%-20% Improvement

14. Analysis of Apple Supply Chain core processes,
challenging issues and complexities of
its operations.

17. 1. Number of Items (Stock Keeping Unit)

22.  The results from the analysis of Apple's processes,
challenging issues and complexities indicates that the
success of its supply chain operations depends on how
well they manage the supplier relationship.
 This includes early supplier involvement in new product
development, close communication and supplier
performance improvement/evaluation.
 The reason is that Amazon's distribution environment
is mathematically solved through the optimization
method.
 Typically, they have determined how many facilities they
should have, where serves which market, items/quantity
stored in each location, how to
manage transportation between warehouse-to-warehouse
and warehouse to customers in order to minimize cost and
increase service level.

23. • Global economy could affect the Company.
• Inventories can become obsolete or exceed the anticipated
demand.
• Some components are currently obtained from the single or
limited sources.
• Company depends on logistical services provided by outsourcing
partners.

24.  Thank-U