Apple Inc.’s operations management (OM) involves the application of the 10 decisions of OM to ensure that all aspects of the business are running smoothly. In operations management, the 10 decisions relate to such aspects as product design, quality management, process and capacity design, and location strategy, as well as inventory management, among other operational areas. In Apple’s case, the 10 decisions of operations management are carefully implemented through coordinated efforts in product design and development, sales and marketing, and the firm’s supply chain, along with the company’s other business areas. With considerable leadership in the computer technology and digital content distribution industries, Apple Inc. is an example of success in addressing the 10 decision areas of operations management. Operational effectiveness and strategies involving technological innovation help the business thrive, in spite of competition involving Dell, Lenovo, Microsoft, Sony, Google, Amazon, Samsung, Walmart, and other companies. This success highlights the importance of Apple’s strategic approaches to achieve high productivity goals and objectives in operations management areas.
Apple Inc. has a dedicated team of senior managers, each of which handles the implementation of measures to address the 10 decisions of operations management. The company has excellent performance in maximizing efficiency in operations management. This operational efficiency translates to competitive advantages and capabilities that fulfill strategic objectives, ultimately leading to the achievement of Apple’s corporate mission and vision statements.
Apple Inc.: 10 Decision Areas of Operations Management
1. Design of Goods and Services. Apple’s processes in the design of its products are handled through a number of organizational components and officials. For example, the development and production of Macs involve a Senior VP for Mac Hardware Engineering and a VP for Mac Software Engineering. This coordination reflects the nature and characteristics of the corporate structure of Apple Inc. In this decision area of operations management, these VPs coordinate with the company’s Senior VP for Operations. The system of interactions ensures that the outputs in this operational area are successful in making Apple excel in the design of its technological products.
2. Quality Management. This decision area of operations management emphasizes quality standards and controls. Apple Inc.’s Senior VP for Operations coordinates with eight other Senior VPs to ensure compliance with the company’s quality standards. The company is known for high quality standards that permeate different areas of the business, including product design and development, retail, marketing, online sales, industrial design, and human resource management. Thus, Apple has a holistic approach in ensuring quality to address this decision area of operations management.
3. Process and Capacity Design. Apple’s human resource management strategies include support to maximize workforce capacity for product development and design. In addition, the company works with suppliers to ensure efficient processes and adequate capacity in this decision area of operations management. For instance, suppliers are given directives for process design, as well as the Apple Supplier Code of Conduct to optimize their human resource management. Moreover, Apple Inc. strives for innovation in its facilities to optimize capacity and process efficiency. Thus, the company has a comprehensive approach for this decision area of operations management.
4. Location Strategy. Apple Inc.’s location strategy is selective, involving limited authorization of sellers. However, most authorized sellers are located in urban centers to maximize foot traffic and brand exposure. At present, the company has hundreds of stores in more than 20 countries around the world. Despite this limited approach to seller authorization, the company is now among the most profitable in the world, and Apple Stores have the highest revenue per square foot of retail space in the United States. Thus, Apple’s selective location strategy successfully satisfies this decision area of operations management.
5. Layout Design and Strategy. Apple’s layout design and strategy emphasize customer expectations. For example, company-owned and authorized-seller stores are spacious with minimal décor to ensure focus on Apple products. In the company’s other facilities, this decision area of operations management is addressed through innovative office layouts that encourage creativity and efficiency of workflows. Creativity is a critical factor among employees involved in product design and development processes at Apple Inc.
6. Job Design and Human Resources. This decision area of operations management requires job design and human resource strategies specific to the trends in relevant HR management needs. In Apple’s case, job design and HR strategies are based on Steve Jobs’ original emphasis on excellence. However, the company has been gradually changing its HR strategies under Tim Cook to reflect a more sociable workplace for optimum employee morale. Apple Inc. has mastered job design and human resource strategies to ensure continued support for its industry leadership.
7. Supply Chain Management. Apple’s supply chain is among the most efficient and streamlined in the world. To address this decision area of operations management, the company uses automation of processes and regular monitoring of suppliers. This monitoring evaluates supplier capacity and productivity, as well as compliance with the Apple Supplier Code of Conduct. The automation aspect serves as the main strength of the corporation’s approach to supply chain management.
8. Inventory Management. In this decision area of operations management, Apple Inc. uses different methods of inventory management, such as the serialized method for effective tracking and control of products. The company also uses the first in, first out (FIFO) method, which ensures that most old-model units are sold before new Apple product models are released to the market. Apple Store managers also handle the inventory management of their respective stores.
9. Scheduling. Apple Inc. applies this decision area of operations management through a combination of automation and manual processes. Automation is used for scheduling activities in the supply chain and production processes. On the other hand, manual scheduling is used for individual Apple Stores and in some aspects of the company’s offices. The main aim of the firm in this decision area of operations management is to maximize the capacity utilization of facilities, equipment and human resources.
10. Maintenance. Apple Inc. addresses maintenance needs through dedicated maintenance teams. For example, the company has different maintenance teams for its various facilities. Apple’s IT teams also function as maintenance teams for the firm’s servers and other IT assets. The VP for Human Resources ensures that the company’s personnel are always at adequate capacity to maintain high performance at the company’s facilities. Thus, Apple effectively addresses this decision area of operations management.
Productivity at Apple Inc.
Apple Inc.’s operations management monitors and evaluates productivity through various criteria. The company’s global size and diverse activities translate to different standards, benchmarks and criteria for productivity in different business areas. The following are some of the productivity criteria in Apple’s operations management:
Revenue per Square Foot (productivity of Apple Stores)
Product Units per Time (productivity of suppliers and the supply chain)
Milestone per Time (productivity of employees in product development)
References
Aly, A. A., & Baker, C. G. J. (2013). Productivity Issues: Industrial Engineering and Operations Management. InHandbook of Food Factory Design(pp. 147-169). Springer New York.
Becker-Peth, M. (2012).Behavioral Supply Chain Contracting: Decision Biases in Behavioral Operations Management. Kolner Wissenschaftsverlag.
Cheng, J. X. (2013, December). Apple Inc. Information Security Research and Inspiration. InProceedings of the 2013 International Conference on Control Engineering and Communication Technology(pp. 192-194). IEEE Computer Society.
Georghiou, A., Wiesemann, W., & Kuhn, D. (2011). The Decision Rule Approach to Optimisation under Uncertainty: Methodology and Applications in Operations Management.
Gupta, A., & Prinzinger, J. (2013). Apple, Inc.: Where Is It Going From Here? Journal of Business Case Studies (JBCS),9(3), 215-220.
Hernandez, J. E., Lyons, A. C., Zarate, P., & Dargam, F. (2014). Collaborative decision-making and decision support systems for enhancing operations management in industrial environments.Production Planning & Control,25(8), 636-638.
Lin, S. P., Huang, J. L., Chang, J., & Kao, F. C. (2012, July). How to start continuously improving innovation in organizational knowledge: A case study on Apple, Inc. InTechnology Management for Emerging Technologies (PICMET), 2012 Proceedings of PICMET’12:(pp. 2290-2309). IEEE.
Liu, S., Smith, G., & Subramaniam, P. (2011, August). An Analytical Network Model for Decision Support in Global Manufacturing Operations Management. InManagement and Service Science (MASS), 2011 International Conference on(pp. 1-4). IEEE.
Santa, R., Ferrer, M., Bretherton, P., & Hyland, P. (2009). The necessary alignment between technology innovation effectiveness and operational effectiveness.Journal of Management & Organization,15(2), 155-169.
A key aspect of Apple's strategy is the ability to balance intense efficiency in operations (in fact the highest efficiency levels in its peer group) with outstanding serial innovation and addictive product design, both of which command premium pricing and redefine markets.
Apple business strategy can be classified as product differentiation. Specifically, the multinational technology company differentiates its products and services on the basis of simple, yet attractive design and advanced functionality. First mover advantage is another element of Apple competitive advantage.
Cut down the number of key suppliers that are involved in manufacturing, shipping and storage. Maintain long-term and strategic relationships with suppliers. Outsource the manufacturing to China, thus reducing the manufacturing cycle time from 4 months to 2 months.
Operational management decisions are determinations made in regard to the routine, ongoing activities in the functional areas of an organization. These involve the daily business decisions that are done in high-volume by every business.
These include scheduling employees or equipment use, what products to purchase from suppliers, executing a billing calculation for a patient, and determining how much inventory to keep are only some of the examples of operational decisions.
The following are some of the productivity criteria in Apple's operations management: Revenue per Square Foot (productivity of Apple Stores) Product Units per Time (productivity of suppliers and the supply chain) Milestone per Time (productivity of employees in product development)
A key competitive advantage for the company is its ability to develop innovative products that share the same operating system, software and applications. This minimizes the risk, timescale and costs of product development, enabling the company to introduce a stream of new products and stay ahead of competitors.
Apple's success lies in a strategic vision that transcended simple desktop computing to include mobile devices and wearables. Both performance and design are key drivers of the Apple brand and its ongoing success.
Apple's corporate-level strategies include the close-related diversification of its products at moderate and high levels, including home computers, personal computers, mobile phones, music stores, and software.
Apple Inc. has a hierarchical organizational structure, with notable divisional characteristics and a weak functional matrix. The hierarchy is a traditional structural feature in business organizations. The divisional characteristics refer to the product-based grouping within Apple, such as for iOS and macOS.
Persons familiar with the matter said that Apple is seeking to beat its objective of distributing 300 million iPhones by 2022 and the shipments of the iPhone 13 range will climb by 30 per cent in the first half of the year, reports DigiTimes.
Apple has a number of exclusive long-term agreements with its key suppliers and uses prepayments to negotiate favourable pricing terms, secure strategic raw materials and guarantee high volumes of production. Apple has also diversified its supply chain to include new manufacturing partners in China and Taiwan.
Foxconn, Apple's largest supplier, is looking to further expand its presence in India with the opening of a new production facility within an existing factory in the country to produce the iPhone, The Economic Times reports.
In the second quarter, Apple had some difficulty meeting demand for the iPhone, iPad, and Mac due to supply constraints, and that is going to get worse in Q3 2022. Apple CFO Luca Maestri said that Covid disruptions in China and silicon shortages are making it difficult to make enough product to satisfy customer demand.
All operations processes have one thing in common, they all take their 'inputs' like, raw materials, knowledge, capital, equipment and time and transform them into outputs (goods and services). They do this in different ways, and the main four are known as the Four V's, Volume, Variety, Variation and Visibility.
At the most fundamental level, management is a discipline that consists of a set of five general functions: planning, organizing, staffing, leading and controlling. These five functions are part of a body of practices and theories on how to be a successful manager.
Decision making can also be classified into three categories based on the level at which they occur. Strategic decisions set the course of organization. Tactical decisions are decisions about how things will get done. Finally, operational decisions are decisions that employees make each day to run the organization.
To be effective, an operational decision must be precise, agile, consistent, fast, and cost-effective: Precise – Good operational decisions use data quickly and effectively to take the right action, behaving like a knowledgeable employee with the right reports and analyses.
Strategic decisions are long-term decisions.Administrative decisions are taken daily.Operational decisions are not frequently taken. These are considered where The future planning is concerned. These are short-term based Decisions.
Apple frequently gives every employee gifts ranging from the iPod shuffle to the iPhone. Even the storefront employees attend a considerable number of learning opportunities, team events, and activities, which allows them to keep their motivation high.
Apple Corporation can develop its employee performance and their work through realization on underperformance issues, encourage continual communication, foster a positive work environment, using utilize data and platforms, and encourage growth through manage performance.
When talking about the Apple performance review cycle, an employee on Quora said, “Apple divides employee performance into three categories: teamwork, innovation, and results.” Employees are given one of three grades for each criterion: “needs improvement,” “met expectations” and “exceeded expectations.”
Apple Keeps Its Product Presentation and Marketing Simple
Apple follows the philosophy of simple is better through their products, they don't overwhelm their targeted customers with too many choices, options or even parameters. Apple lets its products speak for themselves and keeps it's messaging and visuals simple.
Apple also own its own hardware, operating system, applications and services, all tied together rather neatly with its new Cloud architecture. There are no silos inside Apple and all decisions are made by this single executive committee. That is why everything Apple does works together so seamlessly.
Apple's mission is “to bring the best user experience to its customers through its innovative hardware, software, and services.” And in a manifesto dated 2019 Tim Cook set the vision specified as “We believe that we are on the face of the earth to make great products and that's not changing.”
We believe that we're on the face of the Earth to make great products. We believe in the simple, not the complex. We believe that we need to own and control the primary technologies behind the products we make. We participate only in markets where we can make a significant contribution.
The four types of organizational structures are functional, multi-divisional, flat, and matrix structures. Others include circular, team-based, and network structures.
As was the case with Jobs before him, CEO Tim Cook occupies the only position on the organizational chart where the design, engineering, operations, marketing, and retail of any of Apple's main products meet.
Apple has repeatedly said, “Our objective is to make great products and services that enrich people's lives and to provide an unparalleled customer experience so that our users are highly satisfied, loyal, and engaged.
Our goal, in a nutshell, is to obtain stellar products and services within tight timeframes, at a cost that represents the best possible value to our customers and shareholders. If that sounds like a daunting task, it's the same one we assign ourselves.
Critical Decision means a decision on any matter that will or would be reasonably likely to have a material impact on an operational, financial, quality and/or compliance basis, on a Product and/or any of the Services.
Whatever operation needs a solid plan, there are five major components to focus on: Preparation, marketing, logistics, human resources (HR) and financial limits.
Operations managers make a number of decisions related to keeping costs low, improving a company's best practices, purchasing raw materials, overseeing the efficiency of subordinates, managing budgets, performing quality control, and recruiting and training employees.
All operations processes have one thing in common, they all take their 'inputs' like, raw materials, knowledge, capital, equipment and time and transform them into outputs (goods and services). They do this in different ways, and the main four are known as the Four V's, Volume, Variety, Variation and Visibility.
At the most fundamental level, management is a discipline that consists of a set of five general functions: planning, organizing, staffing, leading and controlling. These five functions are part of a body of practices and theories on how to be a successful manager.
It is the effectiveness and quality of those decisions that determine how successful a manager is. Without decision making, different managerial functions such as planning, organizing, directing, controlling, and staffing cannot be conducted.
In most businesses, operations managers oversee the big picture of their organization. They are responsible for managing processes, purchasing, accounting, human resources, inventory, and IT. There are different levels to an operations manager's career path.
Strategic decision making (SOM) is of great and growing importance because of five characteristics of strategic decisions (SOs): (a) they are usually big, risky, and hard-to- reverse, with significant long-term effects, (b) they are the bridge between deliberate and emergent strategy, (c) they can be a major source of ...
Introduction: My name is Edwin Metz, I am a fair, energetic, helpful, brave, outstanding, nice, helpful person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
