Operations : A peek into Apple’s Operations, and how the pieces seamlessly fit together

The much anticipated iPhone X from Apple was finally released early this month. It was surprising to see how many people lined up to buy the new phone, seemingly unawed by the $1000 price tag to acquire the new phone. Huge lineups could be witnessed in all the Apple-owned stores globally. After seeing this,  I wondered, how does the most valuable company in the world manage this? How does it satisfy the demand of the market without running out of supply? These questions remind me of COMM101’s Operations Class, where I remember we were taught that operations is concerned with all processes involved in creating a product or delivering a service. I believe Apple’s success in the technological industry lies in its Operations.

Apple has key decisions and strategies in its operations that have ensured its success in producing high-quality products and delivering the products to its consumers. These include :

1. Design and quality. Apple has been able to produce and maintain a range of high quality products because the design of its products are handled through a number of organizational components and officials. For example, the development and production of Macs involve senior VP for Mac Hardware and a VP for Mac software Engineering. These VP’s coordinate with Apple’s Senior VP for operations.
2. Location Strategy. Apple’s location strategy is selective, only allowing a limited number of sellers. It would come as a surprise that Apple, the largest company in the world, only has 463 stores worldwide. This location strategy has proved to be very efficient and effective for a number of reasons. Some of the benefits of such an approach, as we learnt in COMM101 Operations Class, include : Apple is able to get feedback from customers directly, and faster, It is able to turn sales into cash quickly, and by limiting the number of sellers, it is able to earn higher margins from its products due to a smaller supply chain.
3. Inventory management. Apple uses different methods of inventory management, but one that stands out is the FIFO (First In First Out) method. This means that old model products are sold first before new ones are released to the market.
4. Supply chain management. Apple uses automation of processes and regular monitoring of its suppliers to ensure everything is going on well at all times.

To sum up, Apple also has a streamlined and efficient communication channel, that has enhanced Apple’s ability and capacity to continue meeting the market’s demand for its products. Christine Rowland has great insight about Apple’s operations in her article Apple Inc. Operations Management: 10 Decisions, Productivity. It is quite interesting how all these different pieces fit together, to ensure that the customers have a high-quality product in their hands at the end of a long day of waiting in line.

 

Word Count : 449