Apple Inc. Operations Management: 10 Decisions, Productivity

Apple Inc. operations management 10 decisions areas, productivity, computer, smartphone, digital services business case study analysis
A close-up of an Apple keyboard. Apple Inc. addresses the 10 decision areas of operations management through different managerial channels. The company also satisfies necessary OM decisions to optimize its productivity. (Photo: Public Domain)

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:

  1. Revenue per Square Foot (productivity of Apple Stores)
  2. Product Units per Time (productivity of suppliers and the supply chain)
  3. Milestone per Time (productivity of employees in product development)