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Running head: BEST PRACTICES PORTFOLIO 1

Apple Inc. Best Practices Portfolio

October 5, 2019

Student Name: Dorothy A. Artis

Apple Inc. Best Practices Portfolio

Apple Inc. or Apple is one of the most renowned manufacturing companies in the world. It continues to benefit from the various strong aspects in its practices which have helped it gain an increasing level of revenue for the past many years. It continues to rely on the premium smartphone and laptop market for its revenue. This strategy has shown a success. However, in the coming times, with ever increasing competition, the company will have to rework its best practices.

This paper looks into the various key areas of the organization and shares various best practices it could adapt to help it sustain the competitive advantage it has developed over the other companies in the industry it operates in. For each key area, a number of best practices will be listed. In the end, the best practices portfolio concludes with a few recommendations for the company that can help it further boost its growth in the future.

Background

Steve Jobs and Steve Wozniak found Apple in 1976 in the garage of Job’s home after dropping out form college (Richardson, 2008). The intention behind the creation of this company was top develop computers of smaller size and easier to use. The company started selling computers and made sales of $7.8 million in 1978 and $117 million in 1980 (Richardson, 2008). The company continued to progress rapidly. During this time, the company acquired various other technology firms such as Pixar and also developed its own new subsidiaries such as Next. It continued to release new computers with greater functions and ease of use.

The iPod was launched in 2001 and the iPhone in 2007 (Richardson, 2008). iPad was also released soon. In 2011, the founder and CEO, Steve Jobs passed away. He was known as the key individual behind the renovation in Apple. However, the company did not suffer and continued to work with even a greater level of motivation.

At the moment, Apple continues to maintain its market leadership in premium smartphones and computers despite the aggressive competition from firms such as Samsung, Dell, and HP. In 2018, the sales of Apple were $265 billion with a net income of $65 billion with the greatest sales coming from the United States and Europe (US S&EC, 2019). The product with the greatest sales was the Apple iPhone with its computer line, Mac, at the third position (US S&EC, 2019).

Some of the key areas of the company are as follows:

Contract Negotiations

Like many other manufacturing companies, Apple also outsources its production activities to various suppliers in China, Indonesia, and other Asian nations. Developing a working contract and negotiating its terms and conditions is vital for the success of Apple in the long run. As a best practice, Apple needs to establish a project charter for each component of a model being made through these contractors. It can also develop a project statement of work for each product completed through these suppliers.

Both of these documents would prove to be beneficial for both of the parties. The project charter will define a formal partnership between Apple and the manufacturing supplier. It can include various components such as communication, product design, delivery terms, costs, and so on. The project statement of work would make things even more clear as it would define the services or products to be delivered from each project by the contractor. The project charter can be shared with all the stakeholders so that everyone is on the same page.

It is also important that the project charter and the project statement of work should be aligned with the mission, vision, and goals of the company. The optimum allocation of available resources to ensure the greatest efficiency from each contract is the responsibility of Apple when negotiating a contract (ASPE, 2017).

Supplier Responsibility

The prime goal behind outsourcing manufacturing activities by Apple is to reduce production costs and ensure the greatest production efficiency. When considering these components, the supplier manufacturing the products or components for Apple plays a vital role and has a great responsibility. However, any loopholes can mean trouble for the company if not accurately addressed.

A best practice in this aspect can be to ensure timely and continuous communication between the supplier and the company. This can by developing dedicated lines of communication such as emails, telephone calls, and other suitable means so that any changes or issues are immediately shared between both stakeholders. Both will remain engaged with each other at all times to ensure timely sharing of information.

Another best practice would be defining supplier responsibilities agreement related to procurement and human resource from the start. Sweatshops have been a great deal in the news for the past many years related to outsourcing activities by multinational manufacturers such as Nike (Bain, 2017). By developing a formal contract which elaborates working conditions for the workers working for the supplier, Apple can avoid any negative headlines about the company in the news. This supplier responsibilities agreement can also help ensure that the company and supplier are working towards a common goal.

Production Quality Control

One of the greatest troubles with outsourcing is ensuring that the quality of the products remains the same throughout. It is important that the quality standards and quality checking and assurance methods are defined from the start. A best practice in this regard can be to develop a plan scope management. This scope will define various aspects related to production such as production methods, quality requirements, quality assurance techniques, and the various quality checks the products will have to pass.

By developing such a scope, both sides can be clear on what production quality is being expected. Another best practice can be that Apple requires its suppliers to implements a total quality control system at its manufacturing units. This will help ensure that the level of defects is minimized and quality standards are ensured (ASQ, 2018). It is the responsibility of Apple to ensure that the products being manufactured under its name are fulfilling all promised quality standards or even exceed all customer quality expectations.

Inventory Control

The market Apple serves in is highly dynamic. The products, their specifications, and everything else keeps changing rapidly. New models are being announced regularly. Old technologies become obsolete very quickly. In such a scenario, keeping a large inventory is not advised. A best practice in this regard can be that Apple produces limited quantities of each product. The production should be the highest at the time of launch and should reduce eventually. Lessons learned from the past can prove to be useful. This will also help avoid any buildup of excess inventory as that also has associated costs.

Another best practice can be to reduce the costs of the product after some time to clear off inventory when a new model of the product has been launched. This will also help reduce inventory costs and provide room for new products and models.

Conclusion

At the moment, Apple is doing very well as compared to its competitors in almost every possible aspect. However, to ensure such a success, a company has to continuously evolve. The paper has discussed a few key areas related to Apple. For each key area, certain recommendations have also been made. These best practices can help Apple retain its market leadership position. It can use various factors such as high customer demand, strong financial portfolio, and product innovation to stay on top of the industry trends. However, if these new practices are not adopted, Apple will not be able to maintain its market leadership in the long-run.

References

ASPE. (2017). Responsible Stewardship and Effective Management. Retrieved October 1, 2019, from https://aspe.hhs.gov/system/files/pdf/176966/hhsplanc6.pdf

ASQ. (2018). WHAT IS TOTAL QUALITY MANAGEMENT (TQM)? Retrieved October 1, 2019, from https://asq.org/quality-resources/total-quality-management

Bain, M. (2017). Nike is facing a new wave of anti-sweatshop protests. Retrieved October 1, 2019, from https://qz.com/1042298/nike-is-facing-a-new-wave-of-anti-sweatshop-protests/

Richardson, A. (2008). Apple Computer, Inc. Retrieved October 1, 2019, from https://www.loc.gov/rr/business/businesshistory/April/apple.html

US S&EC. (2019). FORM 10-K. Retrieved October 1, 2019, from https://s22.q4cdn.com/396847794/files/doc_financials/quarterly/2018/Q4/10-K-2018-(As-Filed).pdf