Apple Iphone Logistics Management, Term Paper Example

Logistics refers to the management of how information, goods and other resources such as people and energy flow from their point of origin to the point where they are consumed (Ak?n & Y?lmaz, 2009). Logistics management is the area of supply chain management that deals with how forward as well as reverse flow and storage goods, services and information is planned, implemented and controlled efficiently. The supply management chain of iPhone brings together many suppliers who are situated in different parts of the world. The main suppliers include Samsung and Infineon in Singapore, Primax Electronics andFoxconn International in Taiwan, Broadcomm and Marvell in the U.S and Apple Shenzhen in China. Logistics management is at the heart success of Apple iPhone marketers since any disruption in flow of materials from one of the supplies halts production altogether.

Apple has strategically chosen Taiwan as the production center for six out of the ten parts used to make the Apple iPhone. Logistically, this measure is meant to ensure that as many components as possible are sourced from only one country. However, this approach can also be viewed as a potential constraint or bottleneck. In case there was political turmoil in Taiwan, flow of products and materials would be disrupted, halting all Apple’s operations elsewhere (Quinn & Hillmer, 2008).

Apple iPhone’s prices have nothing to do with the structure of the cost; it has everything to do with what the market is expected to bear (Scholten, 2009). Before an Apple iPhone is accessed by the consumer, materials accessed from three different countries have to be assembled and inventoried before being made to fulfill the needs of retailers and customers. Although Apple has a well-defined target cost structure and a break-even point, the price the company takes into the market is defined mainly by market demand and not the cost structure. For this reason, this is a complex supply chain that is challenging to manage.

The iPad has become one of today’s most popular gadgets that continue to change people’s perception of books. Just like iPods, Apple faces complex challenges in logistic management of iPads. This scenario is complicated by the fact that consumers are always looking for cheap options. In other words, the market, rather than the market structure, dictates the potential of iPads to sell.

The most unique features in the iPad are the Built-in GPS and the ability to make electronic signatures. Logistic managers at Apple understand that the potential for the iPad to sell depends on available of applications to support variability in the functions of these features and streamlining of current operations. Previously, consumers have complained about the disadvantage of using Apple’s software applications for their iPhones, while these applications were originally designed for PC use. The iPad’s long-term market success may depend on the ability by the logistics managers to change all that.

The success of Apple’s iPhone since its introduction in 2007 marks the company’s logistics landmark (Blanchard, 2010). Within the first day of the product’s debut, 270,000 units have been sold. The rate of sales increase was about ten times faster than that of the original iPod. Furthermore, a further reduction of iPhone’s prices lead to doubling of sales volume. By the end of the year, corporate analysts predicted that global consumers would purchase three million iPhones, while another seven million units would be recorded in 2008. Such an ambitious projection is a reflection of the high hopes that the company’s logistics managers had in the iPhone’s market performance.

The success of Apple’s iPhone is based largely on an accurate understanding, by the company’s logisticians, of what is possible in a global supply chain and what is not. A world-class supply chain in the 21^st century posses the potential to generate enormous profits for savvy producers. The 20^th century conception of producers incorporates growers, manufacturers and suppliers. However, in the 21^st century, it incorporates the entire team responsible for overseeing the logistical, managerial and financial aspects of growing, supplying and manufacturing. The potential for these producers to create value can be exploited through transforming innovations of others to create products that appeal to consumers.

Although both the iPhone and iPad have become significant global market players today, they may not maintain this competitiveness in the future without accurate prediction, invention, and repackaging. For instance, the 21^st century world is headed for a situation whereby almost every gadget of technology is a computer in one way or the other. A consumer-centered approach, therefore, is necessary in designing unique, popular gadgets. In the area of provision of iPhone applications, logistics service providers had initially been accused of being technology laggards. However, today, they appear to be taking the lead in popularizing Apple’s products through provision of efficient software downloads that inspire creativity and innovation among user. Interestingly, some of the most successful logistics processes used at Apple were designed as iPhone applications.

However, it is still too early to predict the long-term viability of the logistics management structures used by Apple for both the iPhone and iPad. Meanwhile, the trend created by Apple cannot be ignored in a global market scene where everything counts in large proportions. Furthermore, this trend is of utmost significant to business users, enterprise software vendors and stakeholders in the logistics industry.

References

Ak?n, B. & Y?lmaz, G. (2009). Apple Supply Chain Performance Measurement & Factors, MIS 517 Advanced Operations Management Fall 2009 Presentation Report.

Blanchard, D. (2010). Supply Chain Management Best Practices, Hoboken: Wiley & Sons.

Quinn, J. & Hillmer, F. (2008). Strategic outsourcing, The McKinsey Quarterly, 1(3), 13-45.

Scholten, N. (2009). “Composite Solutions for Consumer-driven Supply Chains” in Bogaschewsky, R., Ebig, M., Lasch, R., & Stölzle, W. Supply Management Research: Aktuelle Forschungsergebnisse 2010. London: Routledge.