...The Apple Supply Chain: The Best in the World? by Steve Banker July 2nd, 2012 Many supply chain professionals consider Apple’s supply chain to be the best in the world. I don’t. The reasoning appears to be that since Apple is one of the fastest growing and most profitable companies in the world, it must surely have one of the best supply chains too. This is a “halo effect” fallacy. Apple is the best in the world at innovative product development. Because the company develops hardware, software, and associated digital services—rather than just focusing on one dimension—it can provide an unmatched user experience. This allows Apple to capture high margins from its products and services. But by my definition, product development is not supply chain management; procurement, manufacturing, and logistics are. That said, Apple has a fascinating supply chain that is very different from traditional supply chains. This supply chain comes with pre-built advantages and disadvantages. On the advantage side, demand management is easier. Apple doesn’t have to get the demand forecast for a new product right. As long as it underestimates demand for a hot new product, Apple will have loyal customers clamoring for the new devices and willing to wait. In fact, the projected backlog leads customers to line up for hours before stores open to buy a new product. This helps to create marketing buzz. Because Apple has become so large, it has procurement advantages smaller rivals can’t match....
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...Supply Chain Logistics Systems Memo Laniece Seamon University of Phoenix ISCOM 352 January 21, 2013 The increased rate of change within the economy was driven by a number of large level forces, due to empowered consumers, technology, globalization, shifts in economic power, and regulations. All of these elements of change raised the importance of supply chain management as a strategic move to gain a competitive advantage. Supply chain management involves integrating three key components across the board within a company’s supply chain; they are information, product or materials, and cash flow. The order processing pertains to the flow of information within the logistics system, which includes several operations. Customers may be required to fill out an order form for requested products. The order is then transmitted and checked. The customer’s items are checked to see if it is in stock and then payment is verified. Next, the items are retrieved from the inventory, packaged and delivered along with their shipping documents. Lastly, the customer must be informed about the status of their order. Inventory management is an important role within logistics system operations and planning. Inventories are stockpiles of products or goods waiting to be transported, manufactured, or sold. Logistics management is a balancing act between minimizing costs and ensuring the availability of goals. Appropriate decisions must be made between key elements such as inventory turnover...
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...According to the M. Porter Value chain is the chain of activities that a firm operating in specific industry performs in order to deliver a valuable product or service for the market. He introduced concept of value chain in his book "The Competitive Advantage" in 1985. Now this concept is one of the best known and widely applied. Value chain analysis helps to identify a firm's core competencies and distinguish those activities that drive competitive advantage. According to Porter: “Competitive advantage cannot be understood by looking at a firm as a whole. It stems from the many discrete activities a firm performs in designing, producing, marketing, delivering and supporting its product. Each of these activities can contribute to a firm’s relative cost position and create a basis for differentiation” (Porter, 1985:33) A view of these activities is given in the following figure. This is simplistic representation of company's value chain. In this figure you can see that activities fall in two categories: Primary and Secondary. Firstly, companies should identify core (primary) activities that would give them sustainable competitive advantage and secondly, identify the assets needed to achieve this advantage. Value chain activities are interrelated and represent value creation. The next figure exhibits Porter's framework of Value Chain Activities Primary Activities: relate directly to the physical creation, sale, maintenance and support of a product or service. These...
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...IT and the Executive: Value Chain Analysis Question: What is a Strategy(1) ? The Oxford English Dictionary defines a strategy as follows: 1: The art of war. 2a: The management of an army or armies in a campaign. 2b: the art of moving troops, ships, aircraft, etc into favourable positions 3: A plan of action or policy in business or politics So let us now ask this question again, and this time attempt to answer it using a more information systems and business oriented language. “Strategy is a rule for making decisions under conditions of partial ignorance, whereas policy is a contingent decision. Business strategy is the broad collection of decision rules and guidelines that define a business’s scope and growth direction.” [1] “Strategy is the pattern of objectives, purposes or goals and major policies and plans for achieving those goals stated in such a way as to define what business the company is in or to be in and what kind of company it is or is to be.” [2] “Strategy formulation involves the interpretation of the environment and the development of consistent patterns in streams of organisational decisions.” [3] “Strategy is a broad based formula for how business is going to compete, what its goals should be, and what policies will be needed to carry out those goals. The essence of formulating competitive strategy is relating a company to its environment.” [4] “ Strategic decisions are concerned...
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...Value chain analysis Value chain From Wikipedia, the free encyclopedia Jump to: navigation, search Popular Visualization The value chain, also known as value chain analysis, is a concept from business management that was first described and popularized by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.[1] Contents[hide] * 1 Concept * 1.1 Activities * 2 Significance * 3 SCOR * 4 Value Reference Model * 5 References * 6 See also | [edit] Concept A value chain is a chain of activities for a firm operating in a specific industry. The business unit is the appropriate level for construction of a value chain, not the divisional level or corporate level. Products pass through all activities of the chain in order, and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of added values of all activities. It is important not to mix the concept of the value chain with the costs occurring throughout the activities. A diamond cutter can be used as an example of the difference. The cutting activity may have a low cost, but the activity adds much of the value to the end product, since a rough diamond is significantly less valuable than a cut diamond. Typically, the described value chain and the documentation of processes, assessment and auditing of adherence to the process routines are at the core of the quality certification of the business...
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...one organism to the other through food chains. The starting point of a food chain is a category of organisms called producers. Producers are, in fact, plants. So, we can say that all the food chains begin with a green plant (or grass) which is the original source of all food. Let us take an example to understand the meaning of food chain. Suppose there is a field having a lot of green plants (or producers of food). Now, plants can be eaten up by a rat. The rat, in turn, can be eaten up by a cat. And finally, the cat can be eaten up by a dog. So, we find that there is a sequence (or order) in which one organism eats up the other organism (or consumes the other organism) to fill its belly. The sequence of living organisms in a community, in which one organism consumes another organism to transfer food energy, is called a food chain. In simple words, a list of organisms (living beings) showing "who eats whom" is called a food chain. Let us make this point more clearly by taking the example of a simple food chain operating in a grassland or forest. In a grassland or forest, there is a lot of grass (which are green plants). This grass is eaten up by animals like deer. And this deer is then consumed (eaten up) by a lion. This simple food chain operating in a grassland or forest can be represented as: Grass --> Deer -->Lion (Producer) (Herbivore) (Carnivore) This food chain tells us that grass is the starting point of this food chain. The grass is eaten up by deer and the...
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...VALUE CHAIN – CRITIQUE/FIRM LEVEL ANALYSIS INDIVIDUAL ASSIGNMENT – UNIVERSITY OF BALLARAT CHINTHAKA ARIYAPALA – ID 30100162 Brief Content Topic Page 1. INTRODUCTION...………………………………………………………………………….. 3 2. VALUE CHAIN FRAMEWORK-CRITIQUE…………………………………………………….. 3 3. MAIN ASPECT OF VALUE CHAIN ANALYSIS…………………………………………………. 3 4. PRIMARY ACTIVITIES…………………………………………………………………………………. 4 5. SUPPORT ACTIVITIES………………………………………………………………….…………. 5 6. LIMITATION OF VALUE CHAIN ANALYSIS………………………………………………………. 7 7. COMPETENCIES……………………………………………………………………………… 8 8. INTERNAL ANALYSIS THROUGH SWOT ANALYSIS……………………………………… 8 9. VALUE CHAIN ANALYSIS……………………………………………………………………….. 9 10. CONCLUTION…………………………………………………………………………………….……. 11 11. REFERENCES……………………………………………………………………………….…………. 13 Introduction The value chain approach was introduced by Michael Porter in the 1980s in his book “Competitive Advantage: Creating and Sustaining Superior Performance” (Porter, 1985). The concept of value added, in the form of the value chain, can be utilized to develop an organization’s sustainable competitive advantage in the business arena of the 21st C. All organizations consist of activities that link together to develop the value of the business, and together these activities form the organization’s value chain. Such activities may include purchasing activities, manufacturing the products, distribution and marketing of the company’s products and activities (Lynch...
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...USA E-mail: ggere@soc.duke.edu Abstract: This paper lays out the main features of the global automotive industry and identifies several important trends. A boom in developing country sales and production has not yet overshadowed the importance of existing markets in developed regions. Regional integration is very strong at an operational level, yet the industry has recently developed a set of global-scale value chain linkages, and retains national and local elements as well. The paper highlights how global, regional, national and local value chains are nested to create a pattern of global integration that is distinctive to the industry. We use global value chain analysis to help explain the limits of build-to-order in the industry, the role of regional and global suppliers, the shifting geography of production and how the characteristics of value chain linkages in the industry favour tight integration and regional production. We describe how industry concentration focuses power in the hands of a few large lead firms and discuss the implications of this for value chain governance and the geography of production. Keywords: globalisation; automotive industry;...
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...Food chain A food chain can be thought of as a transfer of food from trophic level to trophic level (fig. 49.1). Food chains rarely are unbranched since several different primary consumers may feed on the same plant species and a primary consumer may eat several species of plants. The feeding relationships are usually woven into elaborate food webs within an ecosystem. Ecological Pyramids 1. A pyramid of productivity has trophic levels stacked in blocks proportional in size to the energy acquired from the level below. Food chains are usually bottom heavy since only 10% of energy is transferred. 2. A biomass pyramid has each tier symbolising the total dry weight of all organisms in an ecosystem's levels at any given time. Biomass represents chemical energy stored in the organic matter of a trophic level. Most narrow sharply from producers at the base to top-level carnivores at the top. Some aquatic systems are inverted since producers can have high turnover rates. They grow rapidly but are consumed rapidly, leaving little standing biomass. Biomass of top-level carnivores is usually small compared to the total biomass of producers and lower-level consumers. Food chains are limited to 3-5 links due to the multiplicative loss of energy. This also limits the biomass of top-level carnivores that can be supported. Only about 1/1000 of the chemical energy fixed by photosynthesis flows through a food web to a tertiary consumer, only 3 -5 trophic levels can be supported since...
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...-1- The Value Chain The term ‘Value Chain’ was used by Michael Porter in his book "Competitive Advantage: Creating and Sustaining superior Performance" (1985). The value chain analysis describes the activities the organization performs and links them to the organizations competitive position. Value chain analysis describes the activities within and around an organization, and relates them to an analysis of the competitive strength of the organization. Therefore, it evaluates which value each particular activity adds to the organizations products or services. This idea was built upon the insight that an organization is more than a random compilation of machinery, equipment, people and money. Only if these things are arranged into systems and systematic activates it will become possible to produce something for which customers are willing to pay a price. Porter argues that the ability to perform particular activities and to manage the linkages between these activities is a source of competitive advantage. Porter distinguishes between primary activities and support activities. Primary activities are directly concerned with the creation or delivery of a product or service. They can be grouped into five main areas: inbound logistics, operations, outbound logistics, marketing and sales, and service. Each of these primary activities is linked to support activities which help to improve their effectiveness or efficiency. There are four main areas of support activities: procurement...
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...2006 4-1 Value Chain and the QCT Triangle VC allows alignment of processes with customers. This generates a quality advantage. VC focuses cost management efforts. VC provides for efficient processes which improves the timeliness of operations. STRATEGIC COST MANAGEMENT - BA122B - Fall 2006 4-2 Value Chain Benefits Identifies value processes Identifies areas for cost improvement STRATEGIC COST MANAGEMENT - BA122B - Fall 2006 4-3 from Michael E. Porter’s Competitive Advantage SUPPORT ACTIVITIES Firm Infrastructure (General Management) Human Resource Management Technology Development Procurement Inbound Logistics Ops. Outbound Logistics Sales & Marketing Service and Support Value Chain Model PRIMARY ACTIVITIES STRATEGIC COST MANAGEMENT - BA122B - Fall 2006 4-4 Value Chain Elements Customer value added Margin orientation Primary activities Support Activities Inbound logistics Operations Outbound logistics Sales and marketing Service and support Human resources (general and admin.) Tech. development Procurement STRATEGIC COST MANAGEMENT - BA122B - Fall 2006 4-5 Goal of Value Chain Driven by customer perceptions Increase margins Focus on value processess Distinctive capabilities Cost advantages Southwest Airlines Intel Corporation 4-6 Some examples STRATEGIC COST MANAGEMENT - BA122B - Fall 2006 Value Chain Analysis Document...
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...Supply Chain Management for Competitive Advantage CREDITS This statement was approved for issuance as a Statement on Management Accounting by the Management Accounting Committee (MAC) of the Institute of Management Accountants (IMA® IMA ). appreciates the collaborative efforts of the Finance Business Solutions Group at Arthur Andersen LLP and the work of Dr. C.J. McNair, CMA, of Babson College, who drafted the manuscript. Published by Institute of Management Accountants 10 Paragon Drive Montvale, NJ 07645 www.imanet.org All rights reserved IMA Publication Number 00352 ISBN 0-86641-282-4 Special thanks go to Randolf Holst, CMA (Canadian), Manager of Knowledge Creation at Arthur Andersen, for his continuing oversight during the development of the Statement. IMA thanks the Consortium for Advanced Manufacturing-International (CAM-I) for their support in the development of this SMA. IMA is also grateful to the members of the Management Accounting Committee for their contributions to this effort. Copyright © 1999 in the United States of America by Institute of Management Accountants and Arthur Andersen LLP Statements on Management Accounting BUSINESS PERFORMANCE MANAGEMENT Implementing Integrated Supply Chain Management for Competitive Advantage TABLE OF CONTENTS I. Rationale . . . . . . . . . . . . . . . . . . . . . . . 1 II. Scope . . . . . . . . . . . . . . . . . . . . . . . . . 1 III. Defining Integrated Supply Chain Management...
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... BOOK: SUPPLY CHAIN MANAGEMENT AUTHORS:- * PROF. N.H. MULLICK * PROF. MOHD. ALTAF KHAN BOOK REVIEW:- Prof. Mullick and Prof. Khan has written this book with an objective to present a well-documented theory on supply chain management. Supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Supply chain management is typically viewed to lie between fully vertically integrated firms, where the entire material flow is owned by a single firm, and those where each channel member operates independently. There are four major decision areas in supply chain management which are location, production, inventory and transportation and there are both operational elements in each of these decision areas .In essence, supply chain management integrates supply and demand management within and across companies. Supply chain is one way to implement Quick Response Manufacturing (QRM) and which is quite similar to Just In Time (JIT) concept. Supply chain integration reference model has four major components :- * Business process models * Material flow logistics model * Information model * Decision process model The main emphasis of book lies in explaining that Supply chain management is an integrated system of organizations, technology...
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...ADVANTAGE TECHNOLOGY NETWORKS PRACTICE PROCESS BALANCE PERFORMANCE SUPPLY CHAIN SUPPLY CHAIN THE &THE VS. HYPE REALITY 46 SUPPLY CHAIN MANAGEMENT REVIEW · SEPTEMBER/OCTOBER 2001 www.scmr.com The conventional wisdom is that competition in the future will not be company vs. company but supply chain vs. supply chain. But the reality is that instances of head-to-head supply chain competition will be limited. The more likely scenario will find companies competing— and winning—based on the capabilities they can assemble across their supply networks. By James B. Rice, Jr. and Richard M. Hoppe A n increasingly vocal and popular sentiment holds that the nature of competition in the future will not be between companies but rather between supply chains. If this does, in fact, represent the future, how will these chains actually compete against each other? And what can practitioners do now in anticipation of this future? In contemplating the much-ballyhooed supply chain vs. supply chain (SC vs. SC) proposition, we first sought examples of this competition in action. Yet for as many examples of SC vs. SC competition that we found, there were at least as many places where the model didn’t fit. On the one hand, we saw vivid examples where one company or a series of companies had designed supply networks to act with singular focus against other unique companies or groups of companies—for example, Brax, Perdue Farms, and Tyson Foods. Yet more...
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...views on global supply chain management and how you plan to be a part of the field. In today’s global economy companies can no longer compete if they don’t establish collaborative relationships that expand beyond their own organization. In my opinion, Global Supply Chain Management has become increasingly important as companies look for growth opportunities in other countries as a way of increasing their global presence. It is my understanding that in order for countries to do global trade, they need to have attractive fiscal and monetary policy in order to attract foreign direct investment. Most developing countries have recovered from the economic crisis and are growing at the fastest pace they can sustain without increasing inflation. Foreign governments have a big responsibility if they want to create business opportunities for multinational companies. It is their duty to give a lot of thought to how they would respond to global tightening. That’s why I think that by improving the long-term trade outlook and coming up with acceptable reform agendas can certainly go a long way when the emerging economies are trying to boost investor and market confidence. Companies such as Boeing, Pepsi, and Oracle are a few companies who are utilizing a vertical integration approach when trying to manage materials, manufacturing, and distribution. One way to view this opinion is whenever a company deals with a supplier that helps provide the next phase of the supply chain, both benefit from...
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