Apple Inc’ Operations Strategy

Apple Inc. is an American multinational technology company headquartered in Cupertino,

California (USA) that designs, develops, and sells consumer electronics, computer software, and
online services. It is considered one of the Big Four of technology along
with Amazon, Google and Facebook
After Steve Jobs returned to the company as CEO, Apple’s lineup of 15 product families was cut
back to just a handful that share common components. The company tried to use consistent
technologies in its new products. It focused on a few key features in new products instead of
many bells and whistles like some competitors. It focused strongly on meeting new product
deadlines, which were usually within a year.
The most striking change since CEO Jobs took over has been in operations. When Jobs returned,
Apple had about 70 days’ worth of finished goods inventory at the end of each quarter, a $ 500
million-plus drag on profits that was the worst in the industry. Jobs decided to outsource
manufacturing of half of Apple’s products to contractors who could do it far more efficiently.
That decreased finished-goods inventory to about 30 days’ worth within a year, 10 warehouses
for finished products were closed leaving 9 regional warehouses. According to Apple executive
(present CEO) Thomas Cook, “With fewer places for stuff to sit, the less stuff there would be”. If
you have closets, you will fill them up.” The company also began outsourcing the printed circuit
cards used in its products, simplifying Apple’s manufacturing function. Simplicity was the key to
Apple’s operations strategies.
Apple’s list of key suppliers was trimmed from than 100 to just 24. That further eased the job of
keeping track of all the parts used in Apple’s products. And since it meant more business for
supplier. Apple wielded more influence with each –resulting in better prices. Finally, the
company scrapped an off-the-shelf software programme for managing manufacturing and
inventories that had been limping along. Instead, it devised its own build-to-order system for
handling on-line purchases. Apple only 5 percent previously. Apple’s parts inventory was
reduced to less than one day’s worth, obliterating the record in an industry where weeks or even
months was the norm. The company also persuaded key suppliers to set up shop close to Apple
facilities, for just-in-time deliveries.”
Important Note:
 Annual revenue: $265 billion for the 2018 fiscal year
 The world's largest information technology company by revenue
 The world's third-largest mobile phone manufacturer after Samsung and Huawei.
 Apple became the first public U.S. company to be valued at over US$1 trillion.
 The company employs 123,000 full-time employees
 Maintains 504 retail stores in 24 countries as of 2018.
 Operates the iTunes Store, the world's largest music retailer.
 Enjoys a high level of brand loyalty
 Ranked as the world's most valuable brand.

Note: The case was developed by Dr. Gyanesh Kumar Sinha, Associate Professor (Operations and
Analytics), Bennett University, for class room discussion only.
Note: The case was developed by Dr. Gyanesh Kumar Sinha, Associate Professor (Operations and
Analytics), Bennett University, for class room discussion only.