1.1.

Supply chain
management
Project
Submitted to: sir

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SUPPLY CHAIN PROCESSES OF APPLE COMPANY

SUBMITTED BY:

▪ TAYYABA FARID
▪ UMME KULSOOM
▪ SYED FAHAD
▪ SANIYA
▪ SABIHA ARSALAN

SUBMITTED TO: SIR ARSALAN

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 TABLEOFCONTENTS

1) ACKNOWLEDGEMENT
2) EXECUTIVE SUMMARY
3) COMPANY OVERVIEW
4) SUPPLY CHAIN PHASES
5) SUPPLY CHAIN MANAGEMENT FLOW
6) PROCUREMENT PROCESS
7) HOW APPLE HAVE ACHIEVED STRATEGIC FIT
8) OPPORTUNITY AND THREATS FOR APPLE
9) CONCLUSION

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 1) ACKNOWLEDGEMENT:

First and the foremost, all Praises and thanks belong to Almighty Allah for His countless
blessings on us throughout the project. Then we would like to express our deep and sincere
gratitude to our teacher, Sir Arsalan for guiding and helping us throughout the course and who
gave us the opportunity to work on this project on ‘APPLE’ company. We came to know about
so many new things while working on this project.

2) EXECUTIVE SUMMARY

Objectives,scopeandstructureof thereport

Apple Inc. is one of the best companies of today’s times. Not only has it been selling great
products but also this company has been developing a great platform and the best eco system
for its customers who are loyal to the company. Some product sales of the company are
slowing down because of market maturing (e.g. smartphones) or because of decline in general
industry (e.g. music players and computers). Apple has a great competition with a lot of
companies which are well financed and well established such as Alphabet, Samsung, Amazon,
HP as well as newcomers from China like Huawei and Xiaomi. Although the competition is
strong, but still the company managing to grow and thrive within its industries and Apple enjoys
one of the best balance sheets and financial metrics among its peers.

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3) APPLE INC COMPANY OVERVIEW:

Apple Inc., originally Apple Computer, Inc., is an American software and services company that
alsomakes accessories, networking solutions, and third-party digital content and apps. iPad,
iPhone, iPod, Mac,AppleTV,and AppleWatchareamongApple'sproducts. macOS,iOS, iPadOS,
andwatchOS, aswell as iCloud, AppleCare, Apple Pay, and accessories, are among the
consumer and professionalsoftware programs available. Moreover, APPLE is the first
successful personal computer company, and the graphicaluserinterfacewaspopularized
byAPPLE. Cupertino,California isthe headquarters of APPLE.

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 4) PHASES OF SUPPLY CHAIN:

1) SOURCING:

McDonald's and Amazon are close behind in terms of supply chain excellence. Apple is at the
top. In 2013, Apple spent at least 97% of its procurement costs on materials, manufacturing,
and product assembly worldwide. Apple sold 15 million Macs, 60 million iPads, 120 million
iPhones, and 35 million iPods in 2012. Except for essential components, none of these iPhones
were manufactured in the United States, and nearly 85% were assembled in China.

2) MANUFACTURING:

The majority of these vendors ship their assembled parts to large Apple factories all over the
world for further production and iPhone assembly. The parts are shipped to Apple production
facilities in a number of countries, including China, the Czech Republic, Malaysia, Thailand,
and South Korea. Even though they are spread across numerous nations, Foxconn and
Pegatron are the only two businesses that own all of these manufacturing sites. These
Taiwanese companies oversee iPhone production and guarantee that the finished products are
delivered on schedule and to Apple's exacting standards of quality. But nothing compares to
the enormous Foxconn plant in Zhengzhou, China. The New York Times reported that this
factory has a 2.2 square mile footprint and employs about 350,000 people. Apple producers in
Zhengzhou alone can make an astounding

3) WAREHOUSING:

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All iPhones will wait to be delivered to the US Apple warehouse in Elk Grove, California, as well
as some other distribution facilities around the world, including those in China, the Czech
Republic, Japan, Singapore, and the United Kingdom.

Apple typically chooses the air freight service offered by Fedex or UPS for the shorter amount
of time and less expensive price when shipping iPhones to the warehouse and other
distribution centers. (Forbes)

4) DISTRIBUTION:

Since Steve Job’s comeback, Apple has looked for creative ways to streamline the supply
chain. When the majority of businesses still relied on shipments by sea, they began to use
airfreight. In 2001, Apple discovered that shipping products straight to customers from Chinese
production facilities was less expensive. In order to store the inventory in accordance with
demand forecasts, Apple also used intermediate warehouses like UPS and FedEx in addition
to its own facility. In 2022, indirect channels, which include resellers, wholesalers/retailers, and
third-party cellular networks, accounted for 62% of Apple's total sales. For sales amplification,
scalability, and subsidies, these channels are essential (to enable the iPhone to be purchased
by many people). In comparison, the direct channel constituted 38% of the overall revenues.
Stores are crucial for consumer.

5) RETURN:

Within 14 calendar days of receiving your iPhone(s) or iPad(s), if you are not completely happy
with your purchase, you may return your undamaged iPhone(s) or iPad(s) to the Apple Online
Store for a refund. Any opened unit will be charged a 25% open box fee (per unit).

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5) SUPPLY CHAIN MANAGEMENT FLOW:

For APPLE, supply chain management entails a complex network of manufacturers, suppliers,
and logistics providers who collaborate to get the devices from raw materials to the finished
product and then to consumers. Here is a general framework of the progression of materials
and data in the production network:

Apple, the company that makes and sells iPhones and many other products creates a new
product and specifies the necessary materials and components. In order to acquire the
materials and components required to manufacture iPhones, Apple collaborates with suppliers.
Companies that make chips, screens, batteries, and other components might be among these
suppliers.

Utilizing the components and materials supplied by the suppliers, Apple contracts with
manufacturers to assemble the iPhones. These manufacturers could be based anywhere in the
world, including China, Japan, South Korea, Taiwan, and South Korea.

From the manufacturing facilities, the finished products are shipped to warehouses and
distribution centers all over the world. Dealing with this complicated store network requires
organizing the exercises of an enormous number of various gatherings, guaranteeing that
materials and parts are accessible when required, and guaranteeing that the completed items
are conveyed to clients in a convenient and financially savvy way. Apple collaborates with a lot
of suppliers to get the materials and parts it needs to make the devices. Companies that make
chips, screens, batteries, and other components are among these suppliers

a. RAW MATERIAL:
Metals, minerals, plastics, and other materials are just a few of the many raw materials used to
make iPhones. The following are some important raw materials that are used to make iPhones:
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 Plastic is used in various parts of the iPhone, such as the buttons and the housing for the SIM
card. Silicon is used in the chips and other electronic components of the iPhone. Gold is used
in the connectors and other electronic components of the iPhone. In addition to these raw
materials, iPhones also require a wide range of components, such as chips, screens, batteries,
and other electronic components, which are sourced from various suppliers worldwide. Glass is
used for the screen and the back of the iPhone. Copper is used in the wiring and connectors
The acquisition of raw materials, the production of components, and the final assembly of the
devices all make up the intricate supply chain that is necessary for the production of iPhones.

Apple has been making iPhone models using metal from the 6000-7000 series as a base
material for a long time. Manganese and silicon have been added to aluminum from the 6000
series. The alloy’s strength can be enhanced through solution heat treatment thanks to this
combination of elements. 7000 series aluminum is alloyed with zinc and can be precipitation
solidified to give the most elevated strength of all economically accessible aluminum’s. The
aluminum case has a stronger body, is resistant to corrosion, and looks good because of the
oxide layer.

Notwithstanding, in the model of iPhone X, treated steel replaced the aluminum body that has
been utilizing since iPhone 4.

b. BODY MACHINING:

c.
In the wake of choosing the legitimate metal for the assemblage of iPhone, the cycle follows
the machining tasks. As can be seen in the production videos for the iPhone 7 and iPhone 5,
the milling process is used to finish all of the surfaces, starting with aluminum. The edges of
iPhones are given a shiny finish with diamond tools. The milling process is precise so that the
product has a sculptured appearance and is in good harmony with the gorilla glass.

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 Rotational 3D Polishing (High Glass Finish) In September, Apple held a media event to
introduce the new iPhone 7, highlighting the aluminum finish and introducing a brand-new
“rotational 3D polishing” process. Apple claims in a news release that the new jet black finish is
achieved through an innovative nine-step process of anodization and polish for a uniform,
glossy finish, protection against dust, splashes, and spills.

d. Packaging Source:

Apple, which designs and sells iPhones, collaborates with a number of suppliers to procure the
materials for its product packaging. Paper, cardboard, and other materials used to make the
boxes and inserts for the packaging are among these materials. Plastics and other materials
are also used to make the protective packaging inside the boxes.

Apple has made it a goal to use recycled and sustainable materials in its packaging whenever
possible. The company’s iPhone boxes, for instance, use water-based ink and are printed on
100% recycled paper. Additionally, Apple collaborates with suppliers to develop recyclable and
resource-efficient packaging materials.

Apple works with logistics companies to manage the transportation and distribution of its
products from warehouses and distribution centers to retailers and other outlets where they are
sold to consumers. This includes sourcing materials for the products’ packaging. This includes
handling and storing the goods during transportation to keep them safe from damage.

e. Process of Manufacturing:

The Acquisition of Raw Materials and Components, Device Assembly, and Quality Assurance
of the Final Products are All Parts of the Complex Manufacturing Process for iPhones. A more
in-depth look at the iPhone manufacturing process can be found here:

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 • Acquisition of natural substances and parts: In order to procure the materials and
components required to manufacture iPhones, Apple, the company that designs and sells
them, collaborates with a number of suppliers. Companies that make chips, screens,
batteries, and other components are among these suppliers. The components and
materials are transported to the factories, where they are kept until they are required for
production.

• Gathering: Through a series of processes that may include machining, stamping, casting,
and other operations, the raw materials and components at the manufacturing facility are
transformed into the finished iPhone. After that, a combination of automated machinery and
human labor is used to assemble the various pieces into the final iPhone.

• Evaluation and control of quality: After the iPhones have been assembled, they are put
through a series of tests to make sure they meet the quality and performance requirements. In
order to guarantee that the devices are ready for consumers to use, these tests may include
functional tests, environmental tests, and other kinds of tests.

• Shipping and packaging: The iPhones are packed and shipped to warehouses and
distribution centers around the world after passing the necessary tests. They are then shipped
to stores and other places where customers can buy them.

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 f. DISTRIBUTION:

g. The transportation of iPhones from the manufacturing facilities to the point of sale for
consumers is part of the distribution process. Here is a general blueprint of the progression
of materials and data in the dissemination cycle for iPhones:

• From the manufacturing facilities, the finished iPhones are shipped to warehouses and
distribution centers all over the world.

• The iPhones are shipped to retailers and other locations where they are sold to customers
from the distribution centers and warehouses. Third-party retail stores, authorized Apple stores,
and online marketplaces are examples of these outlets.

• Orders, shipments, invoices, and other documents are constantly transferred between the
various parties involved in the distribution process.

h. TRANSPORTING ABROAD:

Container ships used to transport Chinese-made personal computers to the United States,
taking approximately a month to do so. Smartphones are small enough to be cost-effectively
shipped by plane in large quantities. In its aluminum canisters, a single wide-body Boeing 747
can easily transport 150,000 products.

The iPhone Is “shipped to distribution centers around the world, including Australia, China, the
Czech Republic, Japan, Singapore, the U.K., and the United States” (The IPhone’s Secret
Flights) after workers craft the numerous components into the finished product. In order to
make the distribution process simpler for them and more convenient for customers, Apple
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maintains a network of warehouses around the world where the phones are stored. On
account of the absence of weight of the telephones, transportation is made modest and simple.

The network of labor and production processes that make up the iPhone have little effect on
the world. The global economy benefits from the employment generated by the distribution and
storage of these iPhones. The fact that the boats, trucks, and planes used to transport the
iPhones do pollute the atmosphere is one negative aspect of this product’s widespread
distribution.

Additionally, Apple’s own retail locations are the ideal venue for showcasing its technology.

Explanation of Apple’s direct distribution strategy These are essential to Apple’s success
because they enable the company to provide a high-quality purchasing experience for its
products that places an emphasis on service and education.

Apple also continues to open new stores around the world for this reason. Despite the fact that
this is an essential component of Apple’s distribution strategy, it is also quite costly.

However, control over a distribution strategy necessitates enormous resources, whereas Apple
has complete control over the customer experience.

Apple can employ experienced and knowledgeable staff using this strategy to provide a
comprehensive selection of third-party hardware, software, and other accessories to
complement its products.

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Hence, Apple’s store, and direct channel, assume a critical part for the accompanying reasons:

• Extensive exposure of the brand because Apple’s owned stores are situated in some of the
world’s most recognizable locations and frequently feature stunning architecture, in keeping
with the fact that Apple views itself as a design/UX company.

• The growth of the service industry. As shoppers can

be taught in the stores, pre and post-deals backing can
be given.

6) Procurement processes:

It is extremely important for a brand to maintain a good relationship with its supplier so as to carry
out the procurement processes smoothly. Procurement process have two subsets;
purchasing and sourcing

Purchasing process of Apple.

Relationship with the Supplier Base:

Apple only works with their trusted suppliers for all goods and services, expecting the
suppliers to satisfy the highest standards in terms of quality and reliability. Quality
assurance and the suppliers who upholds with highest standards 9f social responsibility
as well like Apple itself. Suppliers who understand work and culture and respects them,
who have knowledge about the company’s mission, vision and criteria and make an extra
effort to learn about what value they can provide us with and how Apple values their
partners. And their foremost task will be to understand the value of keeping the promise
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 and delivering high quality of services and goods. Apple operates in a competitive and
fast-paced environment. Our suppliers must be aware of this dynamic and be able to
adapt quickly and effectively to changing business conditions. Apple priorities invention
beyond anything else. Suppliers that actually understand and share our issues, as well as
those who assist us in finding the best available solutions, are valued.
.

7) Supplier Diversity Program

Apple have strong relationships with all of its supply base and have a vast diversity of
different suppliers they have different types of contracts with each supplier and have
been maintaining friendly relationships with them while fulfilling their social and
environmental obligations. Apple's Supplier Diversity Program was originally formed in
1993, and the business has continued to expand and support the participating suppliers
since then. Apple actively participates in industry diversity leadership activities through a
number of non-profits, including the National Minority Supplier Development Council
(NMSDC), the Women's Business Enterprise National Council (WBENC), the National
Veterans Business Development Council (NVBDC), the National LGBT Chamber of
Commerce (NGLCC), Disability: IN, the Canadian Aboriginal & Minority Supplier Council
(CAMSC), Minority Supplier Development UK, and Minority Supplier Development China,
as well as its own supply chain. . Apple was accepted into the Billion Dollar Roundtable
(BDR) in 2016, and is still a member in good standing.

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8) Sourcing program
Apple's sourcing method is meant to guarantee that suppliers are treated equally and
fairly, allowing them to compete in a competitive procurement process. We urge that
interested suppliers register through Apple's Prospective Supplier Portal; a secure online
database is maintained by Apple for possible vendors. Apple procurement experts may
use the Prospective Supplier Portal to find out about possible suppliers' skills, Supplier
Diversity certifications, product/service descriptions, industry classification codes, and
contact information.

7) HOW APPLE ACHIEVE

STRATEGIC FIT:

Apple have been the market leader, especially in mobile phone industry for the recent few
years because of its brilliant business strategy. Apple very effectively combines its,
hardware expertise, design capabilities, and software processes, the company has built
itself so profitably that a first-time user consumer won’t want to leave apple ever. Another
reason for Apple success is Vertical integration, which exemplifies that a company
controls the component parts as well as the end products. Designing both the hardware
and the software for its products. For a company like Apple to achieve a strategic fit, it
that they truly understand its customer's needs, and state from its annual report, they say
that Apple is devoted to bringing the best user experience to its customers which is at the
heart of Apple. And Apple uses its innovative hardware, peripherals, services and
software. The Company’s business strategy is in its capability and its unique ability to
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design and develop its operating systems (also known as iOS), hardware, application
software, and services to provide its customers with new products and solutions with
excellent ease of use. innovative designs and seamless integration are their greatest
advantage through which Apple outshine the crowd. Also, Apple believes in continuous
investment in R&D. because of its unique design, and because Apple believes in
continuous investment in research and development. Apple's marketing and Advertising
strategies are vital to the development and sale of innovative technologies and product.
Apple achieving strategic fit can be observed by their corporate strategy in which they
introduce new product line bit expand the previous one by using very similar inputs each
time. Although Apple is a pricey brand but its integrated value is that they provide their
customers with the smooth connection and link between their hardware and software
which creates value along their customers. Apple launch Every year a new iPhone
launches with a very similar design and this factor has also helped Apple to be one of the
most successful companies on the globe through constrained diversification that is
innovation with a little but major change each time. As per their website, one value of
Apple is,

“We believe in deep collaboration and cross-pollination of our groups, which

allow us to innovate in a way that others cannot.”

Apple’s R&D strategy to achieve strategic fit;

Research and development are done by every company consecutively to increase their
revenue and improve their products in terms of technologies, conveniences Leeds and
desires. Apple is a brand with millions of loyal customers who waits every year for a new
launch of their bestselling product iPhone and the company also prioritize customer
experience more than the technicalities, speed and storage capabilities. Apple in Forbes
magazine have been ranked as the most valued brand in 2020 and have been in that
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position for the past 10 years. Apple think out of the box to provide services and new
features beneficial for the customers as well as the ecosystem. Examples of this new
technologies are Apple Pay secure payments and the introduction of facial recognition on
the iPhone X. Apple has increased its Artificial intelligence AI, as they’ve been working on
to launch some future innovate products such as Apple car, AR/VR headset, AR smart
glasses.

Supply Chain Capabilities:

One IT research firm ‘Gartner’ has ranked Apple’s supply chain as the best supply chain
in the world since 2013. The ‘iPhone’ is specifically designed in California. Then to
describe its supply chain in a nutshell, it purchases components from suppliers located in
six continents. Then these parts are shipped to China for assembling. And then from their
products are shipped through FedEx or UPS who order u Apple’s online store. One of the
successful critical factors of Apple’s supply chain is that it treats its hardware products;
MacBook, iPads and iPhones as perishable goods. Just like for certain food products, it is
also true for Apple’s products because nobody has ever heard of or seen or stood in long
queues just when a new iPhone was released. Apple recently claimed that they have
around 156 key vendors across the globe. And this amount is quite manageable.
Compared to other big giants who handle such large supply chains such as Amazon.

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8) OPPORTUNITY AND THREATS

APPLE OPPORTUNITIES:

1) CONSISTENT CUSTOMER GROWTH:

For many years, technology sector has been dominated by Apply. Top quality products are
being provided by Applethatoffersabreakthroughincustomerexperience. Apple’s retention rate is
92% which is phenomenal. Reliance on power of internet is good which can lead for
futureopportunities for Apple to gain new and loyalcustomers and formnewalliances.

2) QUALIFIED PROFESSIONALS:

In Apple, there is a team of highly qualified professionals which consists of Apple’s developers,
researchers and product specialistthat also have many years of experience in branding
consumer products. With the expansion of their team,Applecancontinuouslybuild
newopportunities.

3) EXPANSIVE DISTRIBUTION NETWROK:

Expansion of distribution network is a great opportunity for Apple.In today’s time, Apple has a
dis)tribution network which is very limited and also leaves room for minimal growth. Apple can
generate highersales and revenue if it focuses on creating an expansive distribution network.
Furthermore, thecompanycan also have great benefit from promotions and digital marketing.
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 4) LACK OF GREEN TECHNOLOGY:
Products that are created with the help of green technology is yet to launch by Apple.
Implementation andparticipation in creating technology which is eco-friendly has not been done by
Apple.

5) SMART WEARABLE TECHNOLOGY:

World will be dominated by smart wearable technology in few years. According to
Forbes, by 2022, the sales of smart wearable technology devices will be
double.Itwill become a$27billion+market with 233millionunit sales.

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a. APPLE’S THREATHS:

1) AFTER EFFECTS OF CORONA VIRUS OUTBREAKS:

Apple’s manufacturing and supply chain is highly dependent on China. But

due to recent events, the operations are highly being affected and
disrupted. The revenue which comes fromChina (abigmarketforApple) is
about 18% of its $365 billion. In coming years, the outbreak might
significantly abrupt Apple’s business and affects its operations.

2) NO EFFECTIVE COUNTERMEASURE FOR AIR TAGS:

Apple’s air tags are being used with dangerous intents while they were
launched to help its users to find misplaced items using Bluetooth. At
many instances, criminals are using Air Tags to steal cars and many other
items and, worst, stalk people. Apple commented that the FindMyappwill
let users know immediatelyif an unknown accessoryis trackingthem.
However, a more permanent solution is yet to come.

3) APPLE BULLIED BY COUNTERFEITS:

Vulnerability of Apple has increased because in third world countries there

is an illegal utilization of the brand image for the purpose of selling
counterfeit products. Illegal dealers of Apple are selling the counterfeit
products for the same price as an original Apple product. This can result in
negative reviews and bad publicity for thecompany.

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 4) INCREASING COMPETITION:

Apple has solidified itself, but still the threats of competitors are there. As
the advancement in technology is increasing, brands like Samsung,
Google, and Dell are contributing in giving Apple more and more
competition.And asthecompetitionisgetting
tougher,Appleeitherhastobringnewtechnologies in the market or revise its
pricingpolicyto stayahead of its competition

9) CONCLUSION:
The supply chain network the Giant Technology Brand Apple is discussed in this
report. A Well-known for its product design, cutting-edge technology, and combative
idealistic founder Steve Jobs, the corporation was originally founded as a real IT
organisation but later focused on user products because of the fiercer competition
in the technology industry. The supply chain network for Apple's iPhone underwent
a critical investigation, and the results revealed that the company has an inventory
turnover of 10 days, which is sufficient in terms of inventory turnover. In order to
manage its business and supply chain effectively, Apple is advised to outsource its
warehouse activities in order to increase speed while sacrificing internal
dependability.

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