Operation Management 1

OPERATION MANAGEMENT (OM) OF APPLE INC.

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Critically examine three relevant Operation Management (OM) decision areas (e.g., quality,
inventory management, layout or process design, etc.) in your chosen Apple Inc.

Introduction

Apple is an American technology company located in California. It deals with designing,

implementing and selling of electronics and computer related software such as iPhone, HomePod

smart speaker, mac computer, iPod media player, Apple smart watches, and Apple TV. Common

software includes iOS and macOS operating systems, iTunes media player, Safari browser,
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iWork, and iLife. It has developed applications such as final cut pro, logic pro, and Xcode. The

company also offers services online including iTune stores, iOS app, apple music, and iCloud.

Steve Jobs, Ronald Wayne, and Steve Wozniak founded Apple Company in the year

1976. This is among the top five richest company in the world due to its uniqueness, high-quality

products and good reputation in the technological field. Within the years, the company has

continuously improved its computers, laptops, and iPhone by improving features such as camera

quality, incorporating sensors such as Siri, improving screens quality, for instance, using TFT

technology and LED screens, using high speed and quality microprocessors for longevity and

high speeds thus making “World a better place.”

To achieve such a good reputation from its customers, Apple has a strong marketing team

all over the world that make sure its intended customers know their products. In its marketing

strategy, Apple has used a completely different approach to advertise their products. The

company uses slogans to pass the intended information to their esteemed and new customers.

Such slogans include “iThink. Therefore iMac” was an early slogan that was used for marketing

iMac computer.

Operation Management (OM) of Apple Inc.

This section in a company deals with the conversion of items, raw material or products

and labor into finished goods and services in the most efficient ways possible to increase yields

and profit. In Apple, this is achieved through the application of the following decisions of OM to

maximize on profits: product design, process and capacity design, location strategy, inventory

management, quality management among others. These decisions are effectively implemented in
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designing their products, in sales and marketing and also in the companies supply chain. This

decision of OM are carefully implemented by a team of able, dedicated managers to maximize

efficiency in goods and service delivery.

Design of Goods and Services

Design of electronics and software in Apple are handled by several managerial sections of the

organization to ensure each section does what its perfect at doing. For instance production,

development and assembling Mac was done under a senior vice president (VP) for Mac

Hardware Engineering, senior VP of software engineering, and senior VP in charge of

operations. This demonstrates characteristics and the nature of the structure of Apple Company

to allow collaboration of different departments to produce a masterpiece. Thus in this field, all

VPs work with senior VPs to create designs and finally implement them. This coordination and

interaction between senior department staff and engineers ensure that the end products meet the

expectations of the company and that of the customers. This is one of the main reasons why

Apple products and services are accepted in the market as soon as they are produced or offered.

From the creation of the first Mac computer, Apple has extended its product designs to

producing iPhones, smartwatches, iPod, iTunes and software for government, military and

citizens all over the world. In addition to this, they have progressively upgraded both software

and hardware to meet the changing technology. Apple changes with people expectation and thus

is dynamic from the bulky computers of the 80s to a simple computer that is user-friendly and

iPhones. They use the most recent technologies and other accepted applications and software to

make their products favorable and meets all the needs of its consumers. For instance applications
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such as Gmail, Yahoo mail, google chrome and Facebook are build-in their iPhones to make

them readily available when required.

Location, Layout Design, and Strategies

The company location is discrete with more than 450 stores in twenty countries all over

the world. This ensures that the brand product is sold in many parts of the world. The company

is selective with limited authorization to sellers, and despite this, the company is making huge

profits daily with their Apple store being the most profitable per square foot of selling space in

the US. They also embrace selling some of their products online thus making sure that customers

can access their products and services wherever they are through smartphones or computers and

thus connected to the nearest stores.

Apple’s layout strategy and design emphasize on customer’s needs and expectations. For

instance, the company has spacious working spaces and warehouse to ensure products are easily

accessed and no confusion and overcrowding. The offices are designed such that the layouts are

innovative with boost creativity and efficiency of work output. Also, their layouts allow easy

access of floors through lifts; thus time is managed properly. In their outside stores, they are

spacious enough to allow good storage of the products to facilitate easy location and ensures they

are always in good condition. Also, the rooms are secured well through fingerprint and card

scanners to ensure only authorized personnel are allowed to access.

Supply Chain and Inventory Management

Apple has the most streamlined, effective and efficient in the whole world. They achieved

this by automation of most of their processes to reduce human errors and facilitate huge

production per hour. It also regularly monitors her suppliers thus evaluating their productivity,
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capacity and their compliance to supplier code of conduct of the company. Automation is the

main strength of the supply chain of the company. The supply chain is very key in any business

as it explains how good and services are going to be dispatched from the production area to

consumption region.

On the other hand, inventory management, Apple uses serialized means of effective

tracking and control of their products. To facilitate this, they use the first-in-first-out (FIFO)

technique that well ensures that the old products in stores and warehouse are sold first before

new ones are being introduced in the market. This ensures that losses in the company are

mitigated and that the new products that are introduced they are well differentiated from the

earlier versions without any explanations.

To see the difference and similarities between Apple and Amazon in terms of operational

management. (See Appendix A)

Ways to Improve Operational Performance in Apple Inc.

For the best performance of the company, it's important to ensure that we put our focus

on the customers when designing products and coming up we the prices to ensure that they meet

their requirements. This also ensures that more customers can afford the products thus high

demand for the products increasing the total profits of the company. It is also important to ensure

that the strategies of the company, plans, and all activities carried out daily all align with

customer satisfaction and needs. Also, it's important to allocate resources to meet customers

needs thus ensuring the cost of production is gradually reduced.

For improvement of performance, it's important for the company to set the best efficiency

as guidance to improve in production. This should not be easy to attain but should make both

stakeholders and employers happy in trying to achieve it. An old saying goes that “you can’t

manage what you don’t measure.” This needs constant feedback from the company on the

progress towards achieving the set target and for effective planning and establishes grounds upon

which important improvements and in which sectors need to be done first. This is done by

checking the SWOT of the company and analyze it to know where to improve.

Even though efficiency is important, employees should be motivated through the creation

of incentive programs. Unless employees take the company as their own and know big profits

mean better remuneration for them; they will work hard to meet the goals and objectives of the

company. If there exists a vested interest upon completion of a certain project will motivate

employees to do more work and research to accomplish such an object in time and also to enjoy

doing the work thus better improvements. But to effectively perform their duties, they need

proper working tools, insurance cover and updated technology to minimize handwork.
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References
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Appendix A
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Comparing and contrasting Apple with Amazon using the 4 Vs. (Volume, Variety, Variation, and

Visibility)

In terms of volume, both companies employ high volume to satisfy the high demand from their

customers. This is facilitated by automation of processes performed in both companies in

production and supply of goods to customers.

There are various goods and services that are offered by both companies. In the case of

Apple, they offer phones, TVs, MacBook, smart watches, software, and many applications. For

Amazon, they sell furniture, books, electronics, movies, songs online.

Revenue for Apple has been increasing progressively except in 2013 and 2016 where it fell

before drastically increasing to almost 60 billion in 2018. However, in Amazon, the revenue has

been progressively increasing from 2006 to 2018.

Considering visibility, Apple is more visible in terms of operation compared to Amazon. This is

because they involve a lot of processes before coming up with a finalized product to present to

their customers. However, Amazon is an online shop that connects sellers with their customers.