Channels of Distribution:Supply Chain Discussion Paper.
Apple, Inc. is a global multinational corporation known for manufacturing high-quality technological products. The firm is one is the most valuable and leading corporations in terms of revenues. Some empirical evidence suggests that its exemplary success is partly attributed to the excellent supply chain management the company has integrated to its operations. As a global firm with operational bases spread at different points across the world, Apple does not undermine the value of supply chain management. Channels of Distribution:Supply Chain Discussion Paper.Therefore, it is important to examine the firm’s supply chain, with a special focus on the iPhone as its core product to demonstrate the complexity involved in producing the product.
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iPhone is one of the most sophisticated smartphones in the market because of its prodigious software, exceptional camera quality, incomparable architecture, and compatibility with other devices. The belief out there is that the iPhone is designed in the United States and assembled in China is false because the manufacture of iPhone involves close to 11 suppliers positioned in at least four main countries (Dedrick, Kraemer, & Linden, 2011). Channels of Distribution:Supply Chain Discussion Paper.After Apple designs the desired model in its headquarters, it sources a wide range of components from several companies among them including Samsung, Broadcom, Cambridge Silicon, Entry Industrial, and Primax Electronics. Each of these companies supplies Apple with various materials necessary to make an iPhone.
Supply chain, therefore, begins in the US with the design of the smartphone, proceeds to Singapore where Apple contracts Samsung and Infineon for CPU and video processing chips and baseband communications hardware respectively. The company then proceeds to Taiwan where it contracts at least six suppliers (Primax Electronics, Foxconn, Entry, Cambridge Silicon, Omicron, and Catcher) for a variety of components including Bluetooth chips, connectors, camera modules, metal casings, internal circuitry, and circuit boards, among others. Channels of Distribution:Supply Chain Discussion Paper.
Back in the United States, Apple sources touch screen controllers and 802.11 parts from Broadcom and Marvell respectively. Additional suppliers include St. Microelectronics (Taiwan) for the gyroscope, Dialogue Semiconductors (Italy) for power management components and Murata (Japan) for WiFi components (Satariano & Burrows, 2011). After gathering all the components, the firm then transports them to China where Shenzhen assembles all the hardware, holds inventory and handles additional activities such as picking, packing, and shipping. It is from there that Apple supplies fully manufactured iPhones to the rest of the world depending on market demands or directions of its California-based headquarter. Channels of Distribution:Supply Chain Discussion Paper.
The making of the iPhone is a complicated process that involves more than ten contractors in at least five different countries. Although the main production is in the US, a majority of the components and operations involving the production of the product are outside the US. China does not only handle inventory needs but also fulfills the needs of the retailers, and customers who purchase through the Apple Store.
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Dispatch of the finished products is done by air, sea, rail or roads depending on the quantities demanded, destinations, and costs involved. The complexity of the supply chain could be the reason as to why iPhones are always expensive despite other pricing factors playing a role in the determination of what rates to sell the items. A notable fact in Apple’s supply chain is that all roads lead to China.
References
Dedrick, J., Kraemer, K. L., & Linden, G. (2011). The distribution of value in the mobile phone supply chain. Telecommunications Policy, 35(6), 505-521.
Satariano, A., & Burrows, P. (2011). Apple’s supply-chain secret? Hoard lasers. Technology, 4(Channels of Distribution:Supply Chain Discussion Paper.