We decided to analyze the supply chain strategy of a company that has consistently been at the top of the Gartner "Supply Chain Top 25 Ranking" - Apple Inc. Apple's complex supply chain is attributed to the fact that this Fortune 500 company has multiple suppliers located in different parts of the world, mainly in the United States, China, Japan and Taiwan. Apple's manufacturing facilities are predominantly located in China, where products are assembled and shipped in large quantities to various parts of the world for sale. Because Apple's manufacturing occurs overseas in low-cost countries, Apple has a complex logistics network because its upstream suppliers are distributed across the globe, assembly of their products occurs in the Asia Pacific region, and their largest downstream consumer base is in the United States. . This network, in the case of product distribution in the United States, involves both intermediate warehouses in collaboration with UPS and FedEx, and warehouses in California that store bulk finished products imported from production sites in China. This means that since most of Apple's final assembly takes place in the Asia Pacific region, large sums of money are spent on logistics costs, import/export taxes, and warehouse costs for shipping products in large quantities. Apple's distribution to end consumers occurs through three primary avenues: online sales, in-person Apple retail stores, and through partnerships with retailers such as Amazon, Best Buy, Target, mobile carriers such as AT&T, etc. Staying in line with its mission of being a “high-cost, low-supply” company that delivers innovative products to consumers, Apple has grown considerably in size since it was founded by Steve Jobs. Therefore Apple's purchasing organization also enjoys a certain brand advantage which increases its bargaining power when negotiating with suppliers. Because of this, Apple enjoys the latest technology and cost advantages in purchasing the resources needed to mass produce its multiple product lines. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay Since the majority of Apple's manufacturing takes place in China, the company has strategically located its supply base in the Asia Pacific region. First, this creates a big problem for Apple, as it is unable to consistently monitor its own work quality standards along the upstream value chain. One of Apple's iPhone Casting suppliers, Catcher Technology Co., recently attracted media attention because workers at its Chinese manufacturing plant brought to light the problem of having to stand for 10 hours a day and handle substances dangerous chemicals without wearing appropriate protective clothing. . Apple, therefore, was under scrutiny for failing to properly vet its suppliers to ensure their products were not manufactured under unfair working conditions. Numerous issues mentioned in Apple's annual supplier quality report include, but are not limited to, bonded labor, debt labor, lower-than-agreed wages, and poor safety conditions at overseas suppliers' work facilities. We recommend that Apple raise the quality standards of its suppliers by refusing to work with suppliers who do not meet standard Good Manufacturing Practice (GMP) certification requirements, both for direct and contract suppliers. Apple could alsoimpose higher standards on quality controls along the entire value chain, for quality related to product technology and to combat logistical complexities attributed to the complex design of the global supply chain network. They can ensure product quality standards by encouraging suppliers to employ more supplier quality engineers on-site at their locations to constantly perform checks on large batches of products coming off production lines before being shipped for assembly. Such an investment would encourage lower PPMs at suppliers' manufacturing facilities, while ensuring that Apple holds its supplier accountable for meeting its quality standards. Apple should also consider auditing its suppliers' fair labor practices using the Fair Labor Association (FLA) standards as a benchmark. Additionally, they could implement strict controls on workers' wages and discourage underage and debt bondage at supplier locations. Second, given its immense bargaining power with suppliers, Apple's relationship with its suppliers tends to become “one-sided,” especially with smaller suppliers whose revenue is almost completely dependent on Apple's business. Due to its dominant position in the consumer electronics industry, Apple enjoys pricing advantages and can negotiate the most favorable price and material quality for the production of its multiple product lines. Because of this, suppliers earn less profit and their businesses fall prey to Apple's control by being largely, or even completely, dependent on Apple to support their revenues. Apple also has strict non-disclosure agreements (NDAs) for its products that are in development, thus creating a situation where suppliers may not be aware of manufacturing requirements well in advance of launch. Once information has been communicated from Cupertino, California to suppliers in China regarding product design, capacity and tooling requirements, it could be close to the time the product will be launched on the market. This creates situations of pandemonium at Apple's overseas suppliers as they struggle to provide short lead times to meet short product launch deadlines at their existing capacities. To keep up with Apple's pace, suppliers may have no choice but to hire additional workers en masse and extend working hours at their manufacturing facilities to meet demands, thus resulting in unfavorable working conditions. In such high-pressure situations, suppliers must decide whether they would be willing to fail if they did not meet Apple's requirements, since many of these suppliers depend on Apple as their main source of revenue or employ manpower to churn out products based on to the deadlines applied. Unfortunately, vendors choose the latter option, which is to overwork their employees to meet the need for additional capacity on short notice. For example, the problem of short lead times to meet launch requests on time has been a burden borne by Samsung, Apple's OLED screen. supplier for the recent launch of iPhone iPhone The delay is.