Managing Operations Apple Inc Commerce Essay

Managing trading trading operations apple Inc Commerce evidenceorchard apple tree Inc is a large transnational in the consumer electronic spinal columning that go ons on its ability to inclose and spend its strong flexibility in convergence development belt along to wee competitive capability in the market. Fortune named apple as the most prize play along in the initiation. However, orchard apple tree did non figure in the top cristal companies on use of as heaps, social right, and world(prenominal) competitiveness in this survey. This study explores the reasons for this thus far as they lie in commission of operations in the company.A survey of literary works reveals that on that point ar few agreements on what constitutes bleed or bustling manu featureuring and disagreement on the correct choice of operations lie withment schema. We examine whatever one give the bounce find in overcompensates, literature, and the companys avow publications and compar e these to the g slenderings from theory to arrive at some recommendations for Apple to consider for operations management strategy. globularisation has increased complexity of come forth drawing strings that train to span several countries with diverse cultures, laws and regulations, and quantify zones. However, with transplant magnitude pressure on the need to conserve non-re revolutionaryable sources of energy and to mitigate the blow of operations on the environment, globalization is a bidding likely to overturn in the non so far future. Apple must contrive for this by means of innovative strategies in organisation and distri scarceion.We recommend a strategy that simultaneously realises at flimsy when comeressing use of resources and agile manufacturing in addressing client of necessity, to experience competition on both, terms and product differentiation, fronts. In aspect at take to the woods manufacturing, we strongly recommend moderation in executing t o preserve flexibility and legerity.operations circumspection Apple IncContentsOperations Management Apple Inc1.0 IntroductionApple Inc is a large multinational in the consumer electronic business. The call(a) attention of James collins, editor-in-chief of the T3 Consumer Gadgets Magazine, talking virtually the iPod exemplifies the picture and sheer volume of market penetration get hold ofd by the company Collins saysIts cool crossways the board everyone from my seven-year-old niece to my 60-year-old uncle has one.Norbert Reithofer, CEO of BMW adds to the image in his comment (in Bernasek, 2010)Apples clients are more than customers theyre fans. The whole world held its breath forwards the iPad was announced. Thats imperfection management at its very best.Apple builds on its ability to innovate and use its strong flexibility in product development speed to create capability in the market. Consider the fact that Apple introduced 7 different versions of its iPod within f our and a half years of engulf (Levy, 2006). Despite not being the first-to-market, it has used this capability to leverage its expertise in the iPod, iPhone, iTunes, iWorks suite of products and command a premium on all its products (Boddie, 2005). However, on the critical issues of use of assets, social responsibility, and global competitiveness it does not score favourably (money.cnn.com). As long as Apples products command a premium, and as long as it sess continue introducing innovative new products this does not appear a serious concern. However, it is the contention of this report that notwithstanding these factors, Apple stands to gain tremendously by using modern operations management concepts such as flimsy Manufacturing (which we alter to Lean And Green), provide Chain Management, Quality Management etc. In this report, we look at these concepts in some detail to demonstrate how they canister help Apple meet its commitments to its stakeholders and meet the need for Corporate Social Responsibility.2.0 BackgroundApple Inc. (Apple) is a multinational consumer electronic corporation headquartered in Cupertino, California in America established in 1977. The company protrudes, manufactures, and sells hardware and software products for computers, entertainment, and takeout music systems. more or less of its best-known products include the iPod, the iPhone, its desktop and the MacBook Air spot of laptops. Vital backup through software for computers and its iTunes virtual music reposition form grave parts of its operations (google.com).Since its inception, the company did moderately intimately as a number of CEOs changed surrounded by 1977 and 1997 when Steve Jobs, the planter of the company, returned to take prosecute of the company. Steve has remained the CEO since then, except for short periods in 2004 and 2009 when Tim Cook charge during his absence on medical grounds. Since 1997, the company has grown phenomenally and presently employs 35,000 military unit and recorded tax of $42.91 billion for the year ended September 26, 2009 (finance.yahoo.com). materialisation and Simon (2005) call Steves return and the growth of Apple succeeding(a) his return the superior second act in the history of business in the provide of their book.Its stock expenses dropped to a low of $82.33 on January 12, 2009 from the previous high of $193.91 on December 17, 2007 mostly in response to the economic turndown that moved(p) all companies. Since then, the stock has risen steadily and traded at $226.60 on certify 8, 2010 (ibid).Apple has established a unique image for itself through its feature of speech advertising and the contrive of its products. The Fortune magazine named Apple the most admired company in the world in 2009 (Colvin, 2009). Again, in 2010, Fortune named Apple as the most admired company in the world (money.cnn.com b), establish on a survey among intentness filmers using golf club criteria. Importantly, fr om the viewpoint of this report, Apple did not figure in the top ten companies on counts ofUse of Assets,Social Responsibility,Financial Soundness,Long Term Investment, andGlobal CompetitivenessIt rated No.1 and No. 4 on Innovation and Product attri scarcelye respectively. The same report records that Apple have so far sell 250 million iPods, 43 million iPhones, and 32 million iPod Touch, and introduced the game ever-changing iPad portable computer.In 2006, the Mail on Sunday carried a report that alleged Apples contract manufacturers in China, Foxcom and Inventec, were using sweatshop conditions for the production of the iPod (mailonsunday.com) The Washington grade followed washingtonpost.com a). Apple took immediate put through to investigate and correct the situation (washingtonpost.com b).3.0 Theories of Operations ManagementIn the emerging scenario for manufacturing enterprises, three trends evident are the deployment of technology and effort towards lean and thousand manu facturing, choice management (TQM) and the impact of globalization on the thought processes of business. In the following passages, we draw on exist look to deal the points of convergence and the conflicts between different approaches to operations management.3.1 TQM and LeanPettersen (2009) says that it is very difficult to find a definition of lean scorn this being a popular management concept. Some authors have act to define the concept while differents have headwayed whether it is indeed possible to bring in the meaning of lean management through a narrow and restrictive definition (ibid). This enquiryer (Pettersen, 2009) carried out detailed investigating of lean and its hand-to-hand relative TQM that threw up a number of observations that help us discover the concept of lean and TQM. The most important observation is that the two groups , gentlemans gentleman relations management and generate chain management are not definable characteristics of lean they are im portant (although not vital) parts of the lean concept (ibid 132). On the some other hand, TQM get holds employees as components in the production process that cannot be trusted to produce good quality and commissiones on removing possibilities of serviceman error from the system. In addition, this author finds divergence in the general view that lean implies waste drop-off, and says that lean aims at two different types of goals those that are internally focussed, and those that look outward. While internally focused initiatives whitethorn look at cost reduction the externally focused may prove a goal of higher customer satisfaction. In addition, Pettersen (2009) finds divergence in the opinion that lean is a set of practical waste-reduction tools compared to others who believe lean is a philosophical approach to operations management. In his discussion of the similarities and differences between lean and TQM Pettersen (2009) points out that in lean quality is a substitute consideration and decreasing cost through waste reduction is an important concept to lean with some research saying that waste reduction adds to customer value. Waste reduction is a significant aspect of TQM, but under the banner of poor-quality-costs (ibid 134). Perspectives of the two systems also differ. TQM focuses on the internal expression of the organisation while lean sees the need to address the entire tack on chain where the internal organisation is one part of a value-creating stream. other major point of departure between TQM and lean is that TQM strongly marks investigation of customer requirements while lean does not emphasise this as strongly. However, there appears to be convergence in literature that lean manufacturing implies a never-ending focus on trim waste of all types, i.e. waste of materials, time, equipment, space, inventories, and mankind effort across the entire supply chain (Corbett Klassen, 2006). This focus consumes to management of operations in such a way that helps improve quality, cast down costs, and improved service to customers located all over the globe.Pettersen (2009) also points to the numerous similarities in the two systems of TQM and lean. Both see quality as the responsibility of senior management and focus on removing the human factor to lose weight errors. This requires management to concentrate on analysing and improving processes and training people to achieve better quality and cost reduction. Both also focus on continuous improvement through learning with a small difference, TQM looks to actualize believe creativity and learning for the private and quality a result of individual efforts while lean emphasises standardisation of work and collective learning. Both TQM and lean see the importance of supplier and internal worker team friendship through long-term partnerships.3.2 Globalisation, Green and Supply Chain ManagementGlobalisation, provided impulse by the information technology revolution and the lowering of trade and other barriers by nation landed estates, has witnessed increased and free movement of capital and delve across national boundaries. For manufacturing operations, this has meant offshoring of production, inventories, and suppliers as blottos look to find customers across the world and to benefit from the differences in economies, infrastructures, and the regulatory mechanisms that exist in different countries and regions (Manuj Mentzer, 2008). These authors state that firms have restructured their supply chains to operate on a global basis to take advantage of the international product, factor, and capital markets (Manuj Mentzer, 2008 133). Therefore, we can see globalisation as a strong influence on revenue generation by enabling entry into new markets and finding vendors who can supply goods of the same quality at cheaper footings and improved logistics for existing markets. move trends since the last few years have seen companies shift their en tire manufacturing lines to regions that passing game competitive facilities to reduce manufacturing costs.These processes come with some serious downsides also as evident from the complexity of management of a supply chain that extends across several countries that have different laws and regulations, time zones, and cultures. In their drive to source production many companies, including Apple, find themselves accused of chooseing work and labour practices alone unacceptable to western sensibilities but which are okay in those countries. In this last statement, we hasten to add, there is a fallacy in that it is not the acceptability of sweatshops in the host countries of the subsidiaries but more a question of poor monitoring and governance.An added dimension is the increasing stakeholder pressure to ensure sustainability of operations through restraints on the use of non-renewable natural resources, and controlling pollution and emissions that lead to climate change (Sarkis, 2 001 Kovacs, 2008). This pressure to go atomic number 19 requires firms to work with their suppliers and customers to change production processes and promote recycling. Within the organisation, firm now need to disassemble their operations and processes, and assume extended stewardship through the entire life cps of their products to diminish impact on the natural environment through changes that consider a positive attitude toward corporate social responsibility (Corbett Klassen, 2006). The hindrance remains on how to measure the environmental impact of the operations of a firm as no carefuls, except for the ISO 14000 standard. This standard sets out the procedures for identifying environmental aspects of site operations, safe handling and disposal procedures for hazardous materials and waste, and compliance with relevant environmental legislation (Corbett Kirsch, 2001), but does little to provide a metric for measuring the environmental footprint of a multinational and mult i-location firm. Where companies deploy outsourcing as a strategy they may face resistance from suppliers reluctant to adopt green practices as they see these as time consuming and valuable (Larson Greenwood, 2004) and requiring high upfront investment for changing manufacturing technologies on which the return on investment is low (Rothenberg et al, 2001).In implementing greener manufacturing firms need to look beyond chaste cost efficiencies because such initiatives deliver benefits difficult to quantify into money earned, but are substantial nevertheless (Larson Greenwood, 2004). Friedman (2008) points to the example of Wal-Mart who found that their lean and green initiatives improved financial performance and earned them respect from customers. This respect translates to customer preference to buy from environmentally responsible firms and pay a price premium, which can finally influence the bottom line positively. However, having considered that going green holds a number o f potential benefits for the firm it is understandable that global suppliers, not into retailing, may not find these as plausible reasons to make investments for converting to a greener manufacturing technology. Gattiker et al (2008 28) say that. . . it is difficult to ask suppliers to engage in environmental practices when the buying organization lacks (or is perceived to lack) environmental commitment and concrete practices. Thus, buyers may need to get their own house in ball club before requiring the same of suppliers, or vice versa.In the considerations that we have discussed above, one can see numerous conflicts that may arise. For example, lean manufacturing requires movement of materials within the supply chain based on demand. Earlier concepts of safety stocks, bulk purchases to table service discounts, and inventory holding have become pass as firms focus on Just-in-time (JIT) inventory management. However, this requires purchase, production, packaging, and captivate of ever reducing batches of materials that can adversely affect the green approach. Christopher and Lee (2004) discuss this conflict at length to conclude that, in the context of global supply chains, lean manufacturing results in longer lead times and more inventories that contradicts lean management principles. In this, they extend the findings of an earlier research by Levy (1995) that concluded that globalisation of the supply chain results in higher levels of pollution because of the longer transport routes and smaller batches. Rothenberg et al. (2001), in their investigation of the automobile industry, also point to the fact that implementation of lean processes, waste reduction measures do not add to environmental performance or pollution reduction, and that the relation is negative. This contradiction requires the firm to rethink its approach to overcome the negatives of JIT operations and find innovative solutions that may involve re-useable packaging and reduced container s izes and product mix to decrease parcel volume. It is difficult to identify such strategies for global supply chains.4.0 Operations Management Theories and Apple IncHow Apple manages its global supply chains is not promptly discernible from company literature and research documents. The only mention found is on page 16 of the Industrial Engineer magazine that quotes microphone Janes talking of Tim Cook the fill-in chief executive of Apple in the absence of Steve Jobs away on medical leave. Mike says,Supply chain management, which seems so incredibly unsexy, is very sexy when you look at your till account and you have managed the product transitions perfectly. Thats the thing that Tim is absolutely a hold at. Tim is an amazing, brilliant mind when it comes to operational excellence and is really a command of execution Tim Cook is right at the top of the list.Apple enjoys a unique position in the market in that it does not look to measure and investigate customer requirements b ut looks to create customer ineluctably by offering innovative and feature-rich products, which at first sight the customer do not require but soon become a need through use of the product.Another issue that most research in the area of operations management seen in the light of globalisation and environmental pressures misses is the need to think local while going global. The reducing quantities of available natural resources, especially oil, and the disagreement on use of thermonuclear energy, the only viable alternative and increasing pressure on issues related to climate change require companies to rethink their strategies. Apple, in its manufacturing processes emitted 3.87 million tonnes of babys room gases in 2010, added to this is the 5.40 million tonnes that the use of their products by their customers added to the burden. These together represent 91% of the total emissions of pollutants for which Apple is responsible (apple.coma). While Apple, in various statements on it s website, says that they are taking proactive action on these issues and are industry leaders in this respect, we believe Apple has to keep an eye on the future and use its peculiaritys of innovation and agile management to initiate action that will help it and the industry. Steve Jobs says that Apple is far ahead of competitors in these areas and by 2010 Apple will be recycling about 28% of its product in America compared to Dell or HP who achieve about 10%. A reason behind this, Steve explains, is the use of high quality materials that recyclers look for (apple.comb).Apple has taken a number of actions on its own and in compliance with government regulations to mitigate its impact on the environment. Some of the salient actions are the phasing out of lead batteries in 1991, stoppage of use of CFCs in manufacturing, and implementation of the ISO 14000 quality standards in 1996 (apple.come). In 2000, all its manufacturing sites were ISO 14001 certify (calrecycle.ca.gov).5.0 Concl usions and RecommendationsMorrison (2010) uses an analysis of the success factors at Apple to recommend a set of four mantras that other companies could emulate. The first is that one needs to avoid following the herd, a strategy Apple adopted in avoiding the building of a miniature laptop and instead came out with the ultra-thin Air, a product in line with the Apple image. Next, he says is that a company should not back out from fights it can win, a strategy Apple displayed when it pulled NBCs television programs from the iTunes lay in in 2007. NBC backed off within days and now other media companies hesitate to face Apple on pricing. Third, says Morrison is to flatten hierarchies within the organisation, as deep vertical structures tend to dither when it is time to act. Finally, and most relevantly to the context to quality management, Apple has never looked at market research or to emulate its competitors but goes by its own feel to create products like the iPod and the iPhone, which create their own market. While several companies have adopted some of these strategies, none of them has used all four together. The result is the voltaic pile of innovative products that make Apple the most valued company in the world. Morrison says Apples culture has codified a habit that is especially valuable for firms that make physical things Stop, step back from your product, and take a closer look. Without sad about how much work youve already put into it, is it really as good as it could be? Apple asks that question constantly.Hallgren and Olhager (2009) find that in intensely competitive markets, the firm has the option of choosing to distinguish itself on price or on product differentiation, and the choice of operations management must align with the chosen strategy. Lean management is good where the firms aims at cost lead where processes are repetitive, require adherence to predetermined schedules, a unfaltering flow through the production process. Conversel y, where high customisation, changing variety of products, and agility to introduce new products is the determinant of competitive strategy, the firm should choose agile manufacturing. Examining the internal and external factors these researchers (ibid) use a comprehensive review of literature that lean and agile manufacturing differ in the results, one helps cost leadership and the other can significantly raise costs to obtain agility. Examining the deterrent example of Apple, it is evident that the correct strategy must consist of agile manufacturing. However, we do not agree with Hallgren and Olhager (2009) that lean and agile are mutually sole(a) strategies. In this, we find support in the earlier work of Katayama and Bennett (1999) who proposed that a combination of lean and agile is mandatory for long-term competitiveness. These writers see the need for a firm to think lean when addressing resources and agile when looking to build capabilities to meet customer requirements. W e recommend this strategy to Apple.Chen et al (2009) discuss lean concepts and point to potential pitfalls that an overzealous implementation can cause. They emphasise that lean management aims to eliminate waste, effectively manage personnel, distribute design among entities that are best at each stage, work with the supply chain, manage customers, and wisely manage the organizations finances. Their (ibid) paper draws attention to the fact that in addressing body waste of waste the firm may bump elimination of creative time that is so essential for innovation. Focussing on short-term value mental home through cost reductions may threaten competitive ability that can only come through radical and disruptive innovations. Similarly, when a company focuses on building a lean supply chain they risk disruptions of the processes that late or faulty shipments and failure of any of the links in the supply chain (Chen et al, 2009).In these warnings, we see echoes of the very strengths tha t Apple relies on to lead competition.Using the recommendations of Chen et al (2009), we can see that in order to derive maximum benefit from lean operations Apple needs to maintain a high flexibility and agility in its design and manufacturing capabilities linked to the innovative spirit exemplified in its motto Think Different. However, this does not imply that Apple has no use of the concept of lean it is through careful and moderate application of its principles that the company can build strength to meet the stress of economic and political disruptions, and most vitally meet the growing competition brought about by rapid globalisation.Word come 3483