Apple’s supply chain strategy – more insights

An article in bloombergbusinessweek (Nov 7,2011) describes Apple’s plans to invest $ 7.1 billion in its supply chain and commit $ 2.4 billion in prepayments to suppliers. It describes Apple’s decisions to buy such large volumes of high-end drills that competitors had to wait six months for supply. Similarly, Apple’s decision to buy up all of the available air freight during Christmas impacted the flexibility of other players. Other strategies include detailed accounting of material, labor costs and profit margins for supplier quotes.  Do you agree with the claim that operations and supply chain strategies constitute a key reason that Apple can provide new products at prices that the competition cannot meet ? Are Apple’s strategies sustainable ? How important is continued customer demand across product versions and design changes in ensuring success of Apple’s cited strategies ?  Given the benefits of Apple’s cash reserves, is it a better use of the cash than returning it to shareholders as dividends ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Service Operations, Supply Chain Issues and tagged , , , , , , , , , . Bookmark the permalink.

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