Supply Chain Process for Apple & Zara
Customers place orders and purchase phones through authorized dealers/ retailers. 2. Dealers/retailers such as Singlet, epicenter etc runs low in stock and require replenishment from distributors. 3. Various distribution centers runs low in inventories, this triggers manufacturer (Foxing) for more ‘phones to be manufactured and shipped. 4. Manufacturer Foxing starts production schedule planning, procurement of raw materials are done prior to manufacturing actively.
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Figure 1. 2 To competitive strategy consists of all functions that exist in Apple’s phone value Hahn.
Below shows an example of how an ‘phone’s value chain will look like. Components Design Build SO / Lull APS Branding Marketing Sales Billing Network Figure 1. 3 Primarily Outsourced Primarily Apple Looking at the above figure 1. 3, strategy of apple is to outsource functions such as network, billing, components and build. In this case, contracting manufacturer that handles the build function will be Foxing in China. Apple by engaging contract manufacturers such as Foxing, utilizes their economies of scale with high volume and low manufacturing cost as a result of low labor cost in China.
The supply chain strategy here involves long-term partnership with contract manufacturer Foxing, apple enjoys various advantages which includes cost savings, improving operations and gaining of outside technologies and expertise. All these advantages helps Apple to remain competitive in the mobile phone manufacturing market in providing consumers with a product of high level technology at an affordable price. Figure 1. 4 The above figure 1. 4 illustrates the component level outsourcing of Apple phone, the plan here is using the contract manufacturer to procure raw components that are
Apple specific suppliers. These components from different countries, however the supply chain strategy from apple is to purchase most or all of the components from Taiwan. This approach can help to cut short the logistics required to deliver the components to Foxing in China, Taiwan also enjoys and relatively short distance from China which in terms helps in saving logistics transportation costs. However it has one serious disadvantage, if Taiwan were to get into an economical decline or become politically unstable then it could actually destroy Apple phone’s industry.
The supply chain network design often puts one firm in control of it’s long term supply chain strategy. Apple utilizes technology, marketing and efficient distribution and distributes different weight age to each category to achieve strategic fit. The phone’s vast distribution channels by various network providers as well as resellers such as Challenger and Catchy, also though official retail stores and online stores all around the world. In this case Apple is capable of meeting high demand and reaches out to as many customers as possible using that vast network of distribution.
Apple phone’s supply chain strategy involves making use of an effective network design: 1 . Competing in the global smart phone market by providing the latest technology, innovation and product design. 2. Meeting global demand by setting up various regional distribution channels such as retail storage with consumer pickup and manufacturer storage with direct shipping. 3. Tapping onto expertise of contract manufacturers (Foxing Sheen), taking advantage of lower labor cost. 4. Making use of efficient raw component sourcing from various regions, cutting short logistics cost by consolidating sourcing to one region (Taiwan).
The strategic fit of Ezra is related to the consistent demand from consumers with how Ezra respond to the ever changing preferences and needs. The supply chain strategy of Ezra is to construct consistency across consumers and company supply chain, it starts with customer’s priorities to getting onto the competitive edge. Ezra utilizes a vertically integrated supply chain that response efficiently to consumers, strategic fit is therefore achieved by sustaining this form of high responsiveness to customer needs. Deposit Margin Distribution Purchase supplies
Operations competitive strategy of Ezra will consists of all functions in the below Sara’s value chain (figure 1. 5). Figure 1. 5 As you notice, Ezra utilizes in-house production, which Ezra in this case is able to harness the flexibility in variety, quantity and frequency of new styles of products. Thus Ezra is able to constantly provide customers with the most updated products, this cuts short the response time on meeting various customer demands. By doing this, Ezra is able to achieve competitive strategy by offering cutting edge fashion with time during different seasons and trends of markets.