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, despite competition involving technology firms, like Samsung, Google (Alphabet), Dell, Lenovo, HP, Microsoft, Sony, and Amazon, as well as streaming service providers, such as Netflix and Disney. This success highlights the importance of Apple’s strategies for high-productivity goals and objectives in operations management.
Apple Inc. has a dedicated team of senior managers for handling the implementation of measures to address the 10 decisions of operations management. The company has excellent performance in maximizing efficiency and productivity in operations management. This operational efficiency translates to competitive advantages and capabilities that fulfill strategic objectives, ultimately leading to the achievement of Apple’s mission statement and vision statement.
The 10 Decision Areas of Operations Management at Apple Inc.
1. Design of Goods and Services. Apple’s processes in the design of its products are handled through multiple organizational components and officials. For example, the development and production of Macs involve a Senior VP for Hardware Engineering and a Senior VP for Software Engineering. Similar activities and cooperation are seen in operations for the company’s online services. This coordination reflects the nature and characteristics of the corporate structure of Apple Inc. In this decision area of operations management, decision-makers coordinate with the company’s Senior VP for Operations. This 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 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 technology business, including product design and development, retail, marketing, online sales, industrial design, and human resource management. Quality management ensures product quality, which is a factor in the business strengths shown in the SWOT analysis of Apple Inc. The consumer electronics business has a holistic approach to ensuring quality to address this area of operations management.
3. Process and Capacity Design. Apple’s human resource management strategies include support for maximizing 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, the company strives for technological innovation in its facilities to optimize capacity and process efficiency. The consumer electronics and online services business 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 resellers. Authorized resellers are generally 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. This area of operations management coordinates with the marketing mix (4Ps) of Apple Inc., particularly the distribution strategy for consumer electronics, such as iPhones, iPads, and MacBooks. Despite this limited approach to reseller 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, the iPhone maker’s selective location strategy successfully satisfies this strategic 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-reseller stores are spacious with minimal décor to ensure focus on the products for sale, such as smartphones, tablets, laptops, and accessories. 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 HR management in the information technology industry. In this business case, Apple’s organizational culture supports job design and HR strategies based on Steve Jobs’ original emphasis on excellence. However, the company gradually changes its HR strategies under Tim Cook to reflect a sociable workplace with competitive compensation for optimum employee morale. Apple Inc. has mastered job design and human resource strategies for continuing support for its leadership in the consumer electronics industry.
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 a strength of the corporation’s approach to supply chain management. Apple’s corporate citizenship and stakeholder management programs are applied alongside strategies in this area of operations 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 tracking and control of products. The company also uses the first in, first out (FIFO) method, so that most old models are sold before new models are released to the consumer electronics market. Apple Store managers also handle the inventory management of their respective stores.
9. Scheduling. Apple Inc.’s decisions in this area of operations management deal with 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 technology 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 various personnel, work teams, and business processes involving policies for high productivity and efficiency. For example, the company has maintenance teams for its various facilities. IT teams also function as maintenance teams for the firm’s servers and other information technology assets. The VP for Human Resources ensures that the company’s personnel are always at an adequate capacity to maintain high performance. Thus, Apple effectively addresses this decision area of operations management for stable operations throughout the business organization.
Productivity at Apple Inc.
Apple Inc.’s operations management monitors and evaluates productivity through multiple criteria. The company’s global size and diverse activities translate to different standards, benchmarks, and criteria for measuring 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)
- Milestones per time (productivity of employees in product development)
References
- Apple Inc. – Benefits.
- Apple Inc. – Find a Store.
- Apple Inc.’s Form 10-K.
- Apple Inc.’s Online Store.
- Apple Leadership – Executive Profiles.
- Apple Supplier Code of Conduct.
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- U.S. Department of Commerce – International Trade Administration – Media and Entertainment Industry.
- U.S. Department of Commerce – International Trade Administration – Software and Information Technology Industry.