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An Overview of Apple Supply Chain

Article · December 2022

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 An Overview of Apple Supply Chain
Aliyah Terry

Department of Marketing and Supply Chain Management, Willie A. Deese College of Business and Economics, North Carolina
Agricultural and Technical State University, Greensboro, NC 27401, aaterry@aggies.ncat.edu

ABSTRACT
This paper explains the importance of Apple products supply chain. I will dissect the changes and innovative designs Apple
incorporated into their supply chain to reach optimal results. I will also cover their methodology and approach to suppliers and their
supply chain network.

Keywords: Supply Chain Management; innovation; Inventory.

INTRODUCTION
Apply products supply chain is the system that controls the
main factors that allow apple products to reach their
customers. The supply chain is so important because it creates
value not only for the company, but also for the customers and
suppliers. There is a unique combination of technology, human
resources, and materials that make up the system Apple uses
to supply the world with their products.
In this paper I will go over the methodology an
approach of Apple’s current supply chain. I will also cover how
apply implemented changes to its previous supply chain. This
will lead to a discussion on the value gained by Apple and other
parties involved rom their supply chain network.
METHODOLOGY AND APPROACH
Apple’s supply chain suppliers have been cut down throughout
the years. With the current suppliers amount at twenty-four.
This forced supplier to be in competition for Apple’s business.
This has not always been the case for Apple. In 1998 Tim cook
joined the company and later became the Chief Executive
Officer. He transformed Apple’s inventory system to reflect the
concept that inventory in the technology field loses its value
extremely quickly. Apple began beating its competitors in
inventory management by using an inventory turnover
method.
Supply Chain Members
Apple has over two hundred suppliers that provide them with
manufacturing and assembling their products. In Apple’s
supply chain a sizable percentage of their suppliers are in
China. The company has teams that manage specific parts of
the supply chain. These teams include their business
intelligence and analytics team, business process management
team, supply demand management team and so on.
Bill of Materials
Apple has a variety of products that each take a different
combination of materials to build. For one of the most popular
products the iPad Apple has four main components. The iPad
media player, which totals $130.00 in production cost per iPad.
The air interface that totals $19.50 in production cost per iPad.
The PCB level components that total 25.00 in production cost
per iPad, and all other components that total $188.50 per iPad.
This brings the total cost of production per iPad to $363.00.
This is not including other cost related to Apple’s supply chain,
such as the cost of shipping the products from manufacturers
to Apple and other forms of distribution.
Supply Chain Network
For the past decade Apple has been a leader in innovation and
technology all around the world. In 2022 Apple distributes its
products in multiple ways all around the world. Apple products
are available for purchase in retail stores, online, and through

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direct Apple stores. The supply chain network is segmented. concern for apple in terms of their manufacturing and supplier
Meaning that Apply collects needed materials and send them capabilities under certain circumstances. In recent years
to be segmented suppliers that all around the world. Apply Apple's major manufacturers and suppliers were in places
strategically manufactures its products in China. China is heavily affected by the COVID-19 virus pandemic. Another
where most apple products undergo final inspection before major problem for apple is the allegations of Labor exploitation
being distributed across the world. This way the manufacturing that arise in China and other areas where they are heavily and
portion of the supply chain network utilized cheaper labor. supplier and manufacturer presence. There have been
multiple incidents regarding suicide attempts of workers at
Apple’s supply chain combats warehouse cost by having companies that are tied to Apple’s supply chain. There is also
assembled products shipped directly to buyers. Apple also a copyright issue for apple products because of the copied
offers a distribution method that grants them full control over across the world because the people manufacturing the
customer experience. This allows the supply chain to be a products are across the world.
reason apple has a loyal customer base.
CONCLUSION
Added Values by Supply Chain Member
Apple pays close attention to inventory. They use an inventory
Apple uses a multitude of suppliers. After products are shipped
turnover formula that shows how many times a company’s
from suppliers they are then sent to be assembled in China.
inventory can be sold and replaced over a time spam. Apple is
The last step in their supply chain is shipping directly from
a leader in supply chain but has room for improvement in
assembly in China to the customers. The value in this supply
certain areas. Apple supply chain network has extremely well
chain comes from the variety of suppliers available with a
distribution tactics that adhere to the needs of global suppliers
singular location for assembly. All products parts are on route
as well as global customers. Apple also has a proficient level of
to one location that will assemble the finished product. Apple
control over their suppliers this increases their value
also uses an evaluation tactic that utilizes data from previous
years to create a supply chain map. This map helps visualize
REFERENCE
the network from beginning to end.
[1] “Apple Supply Chain - the Best Supply Chain in the World.”
Article, 16 Nov. 2022,
DISCUSSION
https://quickbooks.intuit.com/r/supply-chain/apple-the-
Apple supply chain is extremely different from other supply
best-supply-chain-in-the-world/.
chains around the world. One thing that makes apple supply
[2] “How Can Apple Improve Its Supply Chain – Analysis &
chain stand out is its inventory system and its commitment to
Recommendations: Business Paper Example.” Business,
innovation and manufacturing. Apple specializes in a specific
[3] “Advantages and Disadvantages of Apple Supply Chain -
number of products and has an extremely loyal customer base.
Free Essay Example.” Edubirdie,
Apple also utilizes the limited number of products they make
https://edubirdie.com/examples/advantages-and-
by increasing variation of products to fit diverse types of
disadvantages-of-apple-supply-
customer needs. Apple utilizes strategic suppliers. They have a
chain/#:~:text=Apple%20uses%20best%20practices%20in
set number of suppliers that produce around 98% of their
%20the%20global%20supply,components%20that%20are
manufacturing and assembling. Apple also has control of their
%20shipped%20regularly%20by%20the%20manufacturer
suppliers. One of Apple's main sources of problems within
their supply chain is the global nature of their supply chain
network. In recent years, the global pandemic has created

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