Supply Chain Production Problems Term Paper
Production is a significant function in any commercial enterprise since it enables a firm to convert resources into products that can satisfy a customer’s needs. Efficiency is a cherished ideal in any organization since it allows for an enterprise to use minimal inputs while producing goods. However, the process of production is affected by several challenges which limit the ability of a company to employ resources successfully. To begin with, delivery of products might be a significant challenge, especially if the product is popular, which might affect the uptake of goods in the market (Malcolm 2018). Primarily, a company should be able to maintain constant supply which is aligned with the place element in marketing; however, the aim becomes difficult since the number of raw materials might not be consistently leading to glitches in delivery. Even further, the distribution phase might include delivery issues if not well planned. Apple is an established American brand that has been faced with delivery challenges in its supply chain structure. The company was formed in 1977 by Steve Jobs, Steve Wozniak, and Ronald Wayne and is headquartered in Cupertino, California (Reuters News Agency N.A.). The organization is one of the largest information technology firms in the world by revenue.
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Notably, the company has accused its suppliers of delivering fewer units which result in a shortfall in the market that might affect the brand of the company. For instance, the Hon Hai Precision Industry Co has complained that it is shipping fewer units due to delays associated with the supply chain management. Notably, the iPhone XR and the Ear pods have faced challenges since the company has been unable to satisfy market demand. The iPhone XR has particularly been cited as one of the products unlikely to meet the set production quotas (Bern 2018). The issue has been compounded with decision making challenges at the top leading to the shortfall of the products (SVBJ 2017). The problem can be traced to the overall supply chain management within Apple due to the large size of the organization. However, the problem is not representative of the entire organization since the company has managed to increase the supply of some products (Omar 2018). Notably, the issue is interlinked to other factors that might lower the efficiency of the SCM within the company that will be analyzed in-depth in the subsequent paragraphs (Archie 2017). Specifically, the production unit with the SCM is mostly to blame since they are not churning sufficient numbers of phones required by the customers. Further, the group tasked with the sourcing of raw materials is equally responsible since lack of supplies might affect the manufacturing process. The iPhone model has particularly exposed the weaknesses within Apple since the company was unable to meet consumer demand within the stipulated timeframes (Junwu, Huan, Qilin, & Wei 2017).
The challenge is bound to erode the brand of the company in the market since rivals might capitalize on the weakness to increase their market share. The decision-making structure regarding the SCM is bureaucratic since most of the significant decisions must be undertaken at the firm’s headquarters which affect the manufacture of goods, especially in a dynamic environment. The structure has limited the ability of the supplier to implement the decision in a flexible manner which leads to the bottlenecks with the SCM function. The weaknesses have been capitalized by competitors to increase their market share by streamlining their SCM elements. In relation, Apple relies on some of its rivals that include Samsung to produce some components which places it in an awkward position regarding competition. Overall, the SCM function within Apple has been faced by challenges which have led to delays in the delivery of products to customers.
Analysis of the Supply Chain Issues in Apple Incorporation
Apple is an iconic brand that deals with the production of electronic products. However, the company has faced SCM challenges in the recent past with delays in the delivery of products being one of the issues highlighted. Notably, the company controls a large percentage of the market, which means its products are popular in the market (Johnna & Samuel 2013). Therefore, any delays are bound to have implications for the organization. Towards this end, its suppliers are complaining that they are unable to satisfy the market demand since the available products are insufficient. The problem can be tied to some factors that include lack of sufficient materials to facilitate the production of goods within the company. Ideally, the delivery of inputs is a significant undertaking that should be planned meticulously to avoid any shortfalls in the SCM. However, organizations rely on estimations which are flexible since a firm may lack solid figures concerning the demand for products (Corinthias & Gatot 2012). The massive demand for iPhones is an apt example since the product has become immensely popular in the market and outperformed any projections that the company had regarding the product. In brief, the delivery of finished goods to Apple Inc. customers has been affected by the acquisition of raw materials by suppliers.
On the other hand, the movement of specific components within the SCM might also exacerbate the challenge, especially considering that production should be undertaken with the utmost precision. In this regard, the lead times in the manufacturing process are significant which affect the movement of manufacturing components from one unit to the other, thus changing the entire SCM. Nonetheless, the delays might be understandable since the inputs are sourced from far-flung areas that are not subject to the control of the organization. The issue may be worsened by the fact that most production has been outsourced to external entities which might fail to adhere to the strict timelines required in the production of goods (Metin, Ozturk, Mehmet 2016). Summarily, the production facilities face their challenges that include reduced efficiency in the factories.
In relation, the issue is compounded by the integrated nature of the global market which means changes in prices might have an impact on operational costs (Henrik & Kim 2012). Price fluctuations in the market are known to affect the SCM fundamentally since it determines the cost of production that will ultimately determine the final cost of a product. Unfortunately, an organization might lack control of the raw materials market that is bound to impact its financial position negatively. Again, most firms only acquire the required inputs that further limit its ability to control the cost of raw materials in the market, especially the suppliers which might have an impact on the SCM (Chimaa 2010). The challenge has affected Apple that has been forced to outsource the service to other players in the market which lowers its ability to control the production of units for sale (Quarterman 2012). Fluctuations in the global market might affect the ability of an entity to deliver products within the stipulated or desired timelines.
The supply chain distribution system has become global due to the dispersed nature of sources of raw materials and markets (Henrik & Kim 2012). Therefore, the supply chain might be affected, especially when sourcing inputs which might impact the production of goods in the market negatively. Ideally, any disruptions in the global system are bound to have an impact on the organization since the delivery of raw materials might be delayed. The enormous amounts of raw materials needed by Apple to produce goods might present logistical challenges since the inputs are acquired from far-flung areas that are subject to operational vagaries, for instance, conflict (Chimaa 2010). Most of the raw materials used by Apple to develop its products are sourced from the developing world, especially Africa which is sometimes plagued by incidences of conflict that will affect the SCM. Noticeably, the issue is beyond the control of the company since the conflicts are political and thus require the government to government solutions. Mostly, the integrated nature of the global market is bound to affect the production process in the event of any shift in the market.
The sourcing of raw materials is an essential activity in any organization since the success of the SCM is hinged on the acquisition of raw materials. The process is vital since it enables a firm to plan the production schedule which provides it with a chance to estimate the actual delivery time of products. Importantly, the sourcing of raw materials should be aligned with other production processes to eliminate any wastage and enhance efficiency. The current challenge facing Apple is attributed to fluctuations in the supply of raw materials mostly. Nonetheless, the company has outsourced the task of seeking raw materials to suppliers which have reduced its ability to control the acquisition of inputs (Zhang & Wu 2013). Unfortunately, the situation is bound to affect its image in the market if not well managed. Fundamentally, the production schedule of a company is primarily determined by the acquisition of raw materials.
Quality is another issue that has been cited as compounding the SCM challenge since customers require products that of superior quality. Noticeably, Apple has been faced by quality issues in the past which led to recalls. The production of the IPhone XR has been faced with quality issues, especially regarding the LCD screen (Bern 2018). The supply chain delays have led to the loss of 1.5% sales in the market for the past six months that demonstrates the challenges faced by the entity (Bloomberg view 2017). When viewed against an SCM perspective the problem is likely to initiate other challenges since the firm will be forced to reschedule its production of goods to cater for the faulty products. In support of this argument, suppliers have stated that the quality angle has increased pressure on the company considering that they have to continue production of other units concurrently. The quality problem should be evaluated through the broader framework of SCM since most companies create quality checks that are executed on a continuous basis (Youngsu & Suk, 2016). However, the efficacy of the tests employed might be affected by market expediencies. Apple has sometimes been forced to respond to changes in the market quickly which affects the quality systems used in the organization. When the company is forced to be flexible regarding competition, it may unduly exert pressure on its suppliers that are forced to eliminate some quality activities that affect the SCM. Some of the suppliers have complained that some of the components are difficult to produce within the stipulated timeframes that affect the overall quality of the goods being manufactured. Quality issues have changed Apple negatively leading to SCM problems due to recalls.
The delivery of the iPhone XR is not sufficient with available stocks in retail shops being scarce. The company has faced such hiccups in the past, but the iPhone problem has exposed weaknesses within the Apple SCM. The challenge has led to a decline in the share price of the company which affects shareholders mostly (Hadiyan, Suhaiza, & Keah 2015). Again, the problem might impact consumer sentiment negatively which reduces the overall image of the company. The scenario is bound to affect future sales since investors become wary of the organization’s ability to satisfy client demand. On a general scale, the delivery of the iPhone 5 model has been insufficient, thus affecting the sales of the company.
The outsourcing of the production function to external parties has compounded the SCM challenge since Apple has limited control over the manufacturing process (Cecil, Donald, Barbara, James 2009). The scenario has been highlighted by the insufficient number of units in retail stores since the company does directly produce the goods. Apple does not own any production facility which might affect the ability of the institution to control its SCM function effectively. Even though the company has set stringent measures that suppliers should adhere to, some of the rules may be overlooked in a bid to lower operational costs on the part of the contracted entities. For instance, the development of faulty batteries can be linked to outsourced companies which led to losses since the components had to be recalled. It is evident that quality checks were overlooked by the manufacturing enterprises since Apple only engages in the core business of research and design with the offshore organization producing the products in factories that are situated abroad. Further, Apple is only limited to oversight of the production process which is not entirely useful considering the location of the production units. Structurally, Apple does not own any production facilities which limit its ability to control the SCM function effectively.
In essence, the level of uncertainty within the SCM function within Apple is increasing since the company does not own the production facilities which are mostly situated in Asia (Young 2014). As such, the organization is forced to rely on the schedules of the suppliers which may result in delays, similar to the iPhone debacle where stocks were low in the market. The decision to outsource the service was informed by the desire to improve cost-effectiveness, which forces the company to balance between mitigation of expense and the delivery of products. Apple is known for releasing numerous products into the market which is informed by the increased level of competition that is bound to have an impact on suppliers since they have to recalibrate their systems within short notice to meet the demands of the American giant. The short notice changes are known to have a negative impact on the SCM with quality being one of the challenges discussed earlier in the analysis. Moreover, the distribution of the products will be affected, especially in the absence of an agile framework to address the factors highlighted that appear to plague the Apple brand. Largely, increased uncertainty has changed the production process due to fluctuations in the market.
The decision-making process revolving the SCM function in Apple is another major issue that has affected the production of goods. Major decisions concerning products are undertaken in its headquarters in America which might affect the production of commodities, primarily if the issue to be addressed is urgent. The level of bureaucracy is self-limiting since the suppliers must consult Apple before implementing any major decision (Ramón & Imma 2015). The desire to uphold quality might delay the decision-making process which is bound to result in delays concerning the delivery of products. Nonetheless, some of the decisions are undertaken by the suppliers, especially those related to production at the factory which might have implications beyond the outsourced enterprise. In the past, the SCM element within Apple was known to be agile, but the flexibility has been reduced in light of increased demand that is hurting the entire brand. On a general scale, the decision-making process within Apple has compounded the SCM function leading to low delivery of goods.Supply chain management plays a vital role in any organization since it facilitates the production of goods within an enterprise. Apple has developed one of the most active SCM that lead to the mass production of products in the market (Katherine, Yang, Hang, Jason, Hoang 2012). However, in recent times the company has faced challenges regarding the delivery of units to the market which can be linked to many problems highlighted in the SCM function. Notably, its suppliers have been unable to meet the assigned quotas since the manufacturing process has faced uncertainty. The adverse events demonstrate that the SCM function within Apple is plagued by bottlenecks which are bound to erode its brand in the market.
Quality problems have also been witnessed that include a recall of faulty batteries which add pressure on the suppliers since they have to replace the damaged components while at the same time manufacturing other units. The decision-making process is also affecting the SCM since significant undertaking must be done in the company’s headquarters in America that might delay the production of goods. The resultant effect is reduced ability by the American brand to satisfy demand in the market. The recent events are bound to affect market sentiment negatively since customers might associate poor delivery with the image of the business. Equally, investors might be wary in funding the enterprise due to poor forecast, thus affecting sales and revenue generation. Ideally, the company does not operate any production facility with the service being outsourced entirely to overseas firms which limits the overall control. Besides, the market is volatile regarding the acquisition of raw materials which might affect the continuous production of goods in the market since the inputs are sourced from far-flung areas.
However, Apple can implement a raft of measures that can mitigate the problems associated with the SCM function. Improving its agility regarding the manufacture and delivery of products will prevent any shortfalls in the market similar to the current challenge being witnessed in retail stores in the country. Again, the company should contract several suppliers rather than rely on a few firms which might exploit their bargaining power to control the enterprise regarding price (Atanu, Parmita, & Esmail 2008). Further, the company should not outsource the quality mandate since contracted entities might overlook the requirement in pursuit of leaner systems that will reduce their operational costs. Moreover, the company should review its estimation tools to enable it to predict the production schedule with increased certainty to avoid the delivery of fewer units in the market (Loizos 2009). Moreover, the enterprise should involve the suppliers in the product design cycle which will enable the manufacturing units to align their systems with the overall needs of Apple rather than presenting them with new designs within short notice. Informing the customer on any expected delays early enough can redeem the image of the institution in the market which has been affected negatively in recent months. Risk management is another area that Apple should prioritize since it will enable the organization to forestall any negative issues that range from quality to delays in supply of products (Yan 2017). In summation, therefore, Apples SCM has faced challenges which have limited its ability to deliver products to the market.All free term paper examples and essay samples you can find online are plagiarized. Don't use them as your own academic papers! If you need original term papers, research papers or essays of the highest quality, don't hesitate to contact professional academic writing services like EssayLib. Here you can order your custom paper written according to your specifications. A team of highly qualified writers are available 24/7 for immediate help:
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