Supply chain management is an important factor in an organization, often referred to as a process of excellence in an organization. It mainly focuses on the flow of services, goods, and information to the targeted customers and consumers of the data. An effective supply chain connects manufacturers, distributors as well as customers. During the 20th century, with the invention of computers, the internet, and cargo planes, supply chain management has significantly grown with the effect of supply and demand. The modern operations management is supported by four theories that include the six sigma, lean manufacturing, and business process redesign and the reconfigurable manufacturing systems. This essay applies the modern supply chain management theory to analyze Walmart and Apple supply chain management.
The Overall Design of the Supply Chain
Walmart Inc. Supply Chain Design
Walmart Inc. is an American based multinational retail cooperation operating in chain hypermarkets, groceries, and discounted department stores. The global giant operates over 11,700 stores globally in over 28 countries, with about 2 million employees (Jawad, 2017). The overall design of Walmart Inc. does not follow conventional purchasing, operations, distribution, and integration. The company applies a different supply chain that involves managers deciding on the specific products they will sell, search for vendors, and organize for the deals for the specific product. The operations part of the supply chain primarily emphasizes demand-driven planning, projecting as well as inventory management. Walmart forecasting involves estimating the demands of a particular product while considering historical data, including sales, competition levels, and promotions. The demand planning function increases the accuracy of the forecast, which is a vital factor in creating an effective inventory management plan. A comparison of the inventory and forecasts assists the company in determining whether they have excess or enough to meet customer demand (Mrunal, 2018). The supply chain management of Walmart Inc. results in reduced costs passed to consumers as well as reduce the cost of products and inventory.
Apple Supply Chain Design
Apples' supply chain is ranked top globally. Apple purchases its materials and components from different sources, including the United States, China, Europe, and other Asian countries, and transports it to the assembling plant in china to save costs. Products are then shipped directly to the customers who ordered through the online store. Further distribution channels, including suppliers and distributors, Apple ships its product to its main warehouse in California. Apple product consumers are then returning the products to any Apple store at the end of the product's lifespan (Johnson et al., 2012)
Decision Making in the Supply Chain
Apple has achieved success globally as the most valued company. The external environment factors include an evaluation of how political, economic, sociocultural, technological, ecological, and legal factors affect the supply chain decision making of apple Inc. and help influence the success of the organization. The existing trade disputes between the United States and China is a significant factor that affects the growth of global sale, including electronics. Apple Inc. bulk manufacturers in China through contract manufacturers, including Foxconn ships its finished goods, are shipped to the United States. Because of the risk of increased tariffs to apple products, Apple might be compelled to relocate its production to the U.S. and a disruption to the well-coordinated supply chain. Through regulatory and tax pressures, in the occurrence of a trade war, the Chinese government can complicate Apple's operations in China, disrupting its supply chain. The majority of Apple's economic macro-environment create opportunities such as the increase in disposable income among targeted customers and market growth among developing countries. Developing countries offer a significant opportunity for hr expansion of Apple's supply chain and increase their sales in the foreign markets. A higher disposable income creates more opportunities for the Apple Inc. company to sell their high priced products. The rise of mobile access and digital systems present an opportunity for Apple Inc. to adjust its supply chain management strategies. The developing cloud computing prospects offer an opportunity to Apple Inc. to expand cloud infrastructure and its business. Moreover, sustainable practices that promote effective ecological trends by adopting newer and environmentally friendly technologies affect the supply chain management, and such trends offer opportunities to the company to strengthen its image (Negi and Anand, 2018). The increasing population concerned about environmental safety by improving its operational costs; therefore, Apple Inc.'s strategic measures on its supply chain management affect its operation and decision on its operations and products. Consequently, the increasing legal threats to the supply chain of the company when the government puts more pressure on the privacy of information in the digital age through increased costly regulations in the business environment.
As a retail industry leader, Walmart Inc. continues to incline its supply chain with the effect of threats, sociocultural, technological, ecological, and legal factors. The supply chain requires a continuous evaluation of the retail industry environment. Political pressure for higher wages is a threat to the supply chain of Walmart since it is against the minimization essential its cost leadership strategy. The economic factors present an opportunity for Walmart, such as the steadiness of the U.S. economy, the growth of developing countries, and the decrease in the unemployment rates in the United States. The adjustment on the supply chain and macro-environment should focus on the growing economies that increase goods and services. Consequently, social factors, including healthy lifestyles and urban migration, are significant factors that allow Walmart to expand their distribution and procurement. Moreover, the presence of cultural diversity presents Walmart with an opportunity to diversify its products to satisfy the different cultures. Moreover, the company can adjust its logistic management to exploit the increasing demand for its product in cities. Technological factors, including the rise of mobile app and business automation, are critical factors in the supply chain management of Walmart. The growth of online marketing can play a significant role in increasing Walmart revenues and expand the supply chain. The growing trend in environmentally friendly products has prompted Walmart to improve the standard and strategies concerning its products. The operational efficiency of Walmart concerning inventory management involves systems put in place to effectively track sales and stores countrywide. An effective communication system is vital to improve the operational efficiency. Tax law reforms present a threat to Walmart; however, safety regulations assist in boosting the quality standards of its products.
Apple Inc. Procurement Strategy
Apple Inc. strives to strengthen its relationship with its suppliers; moreover, it seeks to expand its supplier base to cater to the expanding customer base globally. In its sourcing process, Apple ensures equal treatment of suppliers to encourage them to participate in a competitive process. Apple Inc. has established a whole ecosystem of suppliers to support its business. The company is successful due to the robust supply chain network. To become a supplier at Apple Inc., a company must be committed to meet the highest standards for the products they sell (Anon, 2017). Apple Company's suppliers must know their expectations and cultures. The company values the suppliers who consider learning and understanding its business and the ones who innovate new technologies to add value to the company. The business environment for Apple Company is very competitive; hence, suppliers ought to be flexible in responding to varying business circumstances. Apple likes partnering with suppliers that understand Apple's problems and assist in finding probable solutions. Among the most recognized suppliers of Apple Inc. is Foxconn, a Taiwan company. Foxconn is the main supplier of Apple Inc. because it manufactures thousands of iPhones every day at a reasonably lower workforce (Guest-Post, 2013).
Apple has a supplier diversity program that ensures continued support for the suppliers who contribute to the program. The program contains suppliers who are veteran-owned, women-owned, and minority-owned. The process of joining the program includes registering as a potential supplier, screening procedure to select a suitable fit by identifying the supplier's abilities and strengths, and reviewing the supplier's information. Then, Apple Inc. considers the prospective supplier who might be useful in procuring products in case they are needed (Anon, 2017). Additionally, Apple Inc. collaborates with the Supplier Diversity Program contributors to motivate the company's success on diverse supplier foundations and aid in business development.
The sourcing process of Apple Inc. is designed to make sure that suppliers are treated equally and fairly. This is to ensure that they wholly participate in a competitive procurement procedure. Apple provides a secure line database known as Supplier Connect whereby suppliers who wish to participate in the sourcing process can register. Apple updates the database regularly regarding the information about potential and current suppliers. Supplier Connect allows Apple's procurement specialists to access vital information concerning prospective and current suppliers (Guest-Post, 2013). The information accessed includes contact information, goods and services descriptions, and Supplier Diversity certifications. The Apple procurement specialist contacts suppliers whose products are needed. Also, information about potential suppliers whose services are not needed immediately is retained in Apple's private Information folder for six months.
Walmart Procurement Strategy
Walmart sources the products directly from the manufacturers to remove the third parties. In the direct sourcing, suppliers manage inventory in the warehouse; hence, Walmart does not deal with the management of inventory. In 2010, Walmart redefined its sourcing strategy to global sourcing (Mrunal, 2014). International sourcing ensures that consumers get better quality at a low price. The company implemented the global sourcing strategy to continuously increase direct sourcing for Walmart's private brands. The worldwide sourcing plan includes the establishment of Global Merchandising Centers, which develop an alliance between procuring and merchandising through several merchandise classifications (Mrunal, 2014). Walmart has an essential inventory tactic known as Cross-docking, which transport goods directly to outbound trucks from inbound trucks. Cross-docking eliminates storage expenses, inefficiencies, and lowers transport costs (Francis, 2011). Also, Walmart has an online website, corporate.walmart.com, where prospective suppliers submit their applications to sell goods to the company. There are three methods of becoming a Walmart vendor, which include non-resale/services program, local purchase program, and national supplier program.
Production Strategy and Operations
Walmart Inc.'s goal of operation management is maximizing productivity while ensuring the costs are reduced under its strategic cost leadership. Walmart's operation management involves the design of goods and servi...
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