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 others. 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 Apple’s other business areas. With its industry leadership, Apple Inc. is an example of success in addressing the 10 decisions of operations management.
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. Apple has excellent performance in maximizing efficiency in operations management.
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. In this decision area of operations management, these VPs coordinate with Apple Inc.’s Senior VP for Operations.
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. Apple 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, Apple 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 Apple Stores are located in urban centers to maximize foot traffic and brand exposure. At present, the company has more than 450 stores in 16 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, Apple 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 Apple’s HR 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 Apple’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 Apple products. The company also uses the first in, first out (FIFO) method, which ensures that most old-model units are sold before new Apple 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 Apple 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 firm’s VP for Human Resources ensures that the company’s personnel are always at adequate capacity to maintain high performance at Apple 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 Apple suppliers and supply chain)
- Milestone per Time (productivity of Apple employees in product development)
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