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BSS052-6 Project and Operations Management
Introduction of BSS052-6 Project and Operations Management Case Study
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Operations Management refers to the business administration practices that can aid in creating the maximum efficiency level in any business organisation. It mainly involves efficiently converting materials and human resources into commodities and services to maximise the profitability of the business organisation (Abidin, Osman, and Hashim, 2021). In addition to that, operations management also involves forming a different team that makes an effort to balance the costs with revenue to accomplish the highest net operating profit. This individual report is going to discuss the various aspects of operations management. Theme 2 has been chosen, and the whole discussion will revolve around different inventory management, layout design, capacity, location planning, etc.
1. Background of the company
Apple was founded in 1976 by Ronald Wayne, Steve Wozniak, and Steve Jobs. Apple is an American multinational technology company that deals in online services as well as consumer electronics (Opait, 2019). As of January 2021, Apple has generated about $365.8 billion, which makes it the most significant information technology company, and it also shows how valuable the company is (Wu, Mochizuki and Turner, 2021).
2. Critical examination of the three decisions of Operation
As mentioned, Apple is one of the biggest companies in the whole world that has managed to dominate consistently with its distinct offerings in this competitive business environment (Kotliar and Yurchyshyn, 2018). Apple is among the companies required to rely on the highly efficient performance that can only be attained by effective implementation of Operations Management, also known as OM.
Quality Management
One of the critical and important decisions that come under operation management is quality management. Being the most prominent company, Apple has to focus on maintaining consistency in providing quality commodities and services to the end-user. This decision mainly revolves around maximising the operational output's quality to satisfy the customers’ expectations (Ceko, 2021). It can be observed that the approach of Apple is doubling down on innovating and creating new and distinct electronic devices such as Smartphones, Mac Laptops, iPad, CPUs, and many more (Lee and Lim, 2018). Apple can be recognised for utilising the organisational culture to foster and support the idea of innovation creation among the human workforce.
Total Quality Management is one of the theories that can be identified among the various theories of Quality Management (Pambreni et al., 2019). Total Quality Management is a means by which the quality of the commodities and services of Apple, such as its Mac, iPhone, iOS, Apple Watch, digital streaming service (Apple TV+), and quality of goods that are being delivered to the customer on a global scale. Total Quality Management is more focused on customers and very service-oriented (S Hasham, 2018). According to Deming, Quality is directly connected with the work efforts over the overall costs (Iwuchukwu, 2019). Apple is among the big gigantic corporation that offers a wide range of technological devices and services to customers living in different parts of the world. Therefore, when providing a wide range of commodities, there is a vital requirement for Apple to manage the quality of these vast offerings effectively.
Apple is a very popular brand for maintaining and offering commodities that meet the high-quality standards of the company (Gielens et al., 2021). In addition to that, the company also coordinates with eight other senior vice presidents to make sure that the commodities are being created in compliance with the quality standards. Ultimately, Apple has a very “holistic approach” to making sure that consistent quality is being maintained.
Inventory Management
Inventory Management is the procedure of ordering, storing, utilising, and selling an inventory of a business organisation. Inventory Management also involves the different management of raw materials, elements, and finished commodities (Singh and Verma, 2018). It is the whole procedure of managing the inventories from raw materials to finished commodities. It can also aid in streamlining the inventories to avoid the problem of shortage of commodities. There are two effective methods of inventory management which are FIFO (First-In-First-Out) and JIT (Just-In-Time) (Mogbojuri, Olanrewaju and Ogunleye, 2021). Apple also engaged in these primary methods for inventory management, but mostly, FIFO (First-In-First-Out) can be recognised as being utilised immensely by the company. Apple makes sure that the old models of the company can get sold before the new batch of Apple products is launched in the market (Bloch, Brunet and Mattavelli, 2021).
For instance; Some of the commodities that arrive at the various warehouses of Apple in China are shipped directly to the customers that ordered the product online for fulfilling the orders of the customers and the company also sends the manufactured products to the warehouses of Apple in California (Xing, 2021). Furthermore, the commodities that come to the warehouses are sent to the retail stores, network carriers, and wholesalers.
But in this time of the ongoing pandemic, it can be recognised that Covid-19 has disrupted the inventory management of many businesses around the world. But Apple managed to master the art of inventory management since the company engaged in keeping the level of the inventory very low, which presents two benefits (Ravishankar et al., 2021). First of all, the large size inventory tied the cash with the large inventory, which is not a good sign for any company. Secondly, small-size inventories enable Apple to become more agile. As a result, Apple can launch the new electronic devices without the fear of stock becoming obsolete.
Layout or Process Design
Apple has more than 100 stores in various countries around the world. Apple provides limited authority to the seller, and the majority of the sellers that are authorised are situated in the urban areas for maximising brand exposure as well as traffic. Despite having this type of process, Apple is among the most profitable company in the whole globe (Patel, 2020). The layout of Apple is very dependent on the location factors as well, and Apple can be recognised using the “selective location strategy” for meeting the different needs of the operations management (Tien, 2019). The layout and process design aid in influencing consumer behavior and expectations.
For instance, The stores that the company owns and the authorised ones are very spacious with very minimalistic design and décor to ensure that the customer's concentration must be on the products of Apple (Spanke, 2020). In the company's other facilities, it can be observed that it has an innovative layout in the office that promotes creativity and innovation among the human workforce (Maier et al., 2022). Creativity is very important for the employees working in Apple Company since the company is known for innovation and creativeness in its vast range of devices, including the distinct product design and the different development procedures (Kocienda, 2018).
The process design involves the human resource of Apple engaging in maximising the workforce's capacity for product design and development. For example, suppliers aid in designing the company's process since they are given directives for designing the product and the “Apple Supplier Code of Conduct” for optimising the human resource management (Bukhari, 2021). Furthermore, Apple is among the company that is heavily driven by constant innovation and creativity for optimising capacity and increasing the efficiency of the process. Apple also provides the essential supported channels for the consumers who need assistance after purchasing an electronic product. Therefore, the customer experience is a big part of the process design.
3. Comparison and contrasting Apple with utilising the 4Vs
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Dimension
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Apple
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Samsung
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Volume
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Volume involves how much production of specific commodities is enough to satisfy the overall demand of the customer. Apple has already mastered the art of inventory management. It can be observed that even though Apple is the largest company in the world, the company still does not focus on mass-producing its products of Apple. It mainly engages in the conflicts related to designing and producing a limited quantity of apple products that are distinctly designed for meeting the different needs of the customers (Rahmanzadeh, Pishvaee and Rasouli, 2020).
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As discussed, Volume refers to how much production of commodities is suitable for satisfying the demand of the customers in the market. In comparison to Apple, Samsung focuses on mass production and a wide variety of Samsung products. However, apple’s focus on high volume low variety makes the process simpler, and the cost of production also remains very low (Giachetti, 2018). The wide array of Samsung makes the whole process very complicated, and the unit of cost also remains very high. The flexibility of Samsung aids in matching the needs of the customers (FEBIASTUTI and NAWARINI, 2018).
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Variety
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Variety means the wide range of commodities and services to be produced and sold to the consumers (Jabbour et al., 2019). Apple has a very low variety when it comes to a wide range of offerings in the business environment. As mentioned in the above point as well, that apple focuses on product design and development and produces limited apple products (Chen et al., 2018). The products are very well targeted to consumers willing to buy Apple products. For instance, iPhone 13 is being heavily promoted to the targeted consumers. And iPhone SE is also being targeted at mid-tier customers. But the options are still limited as compared to Samsung.
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Varieties are important for any business organisation to influence consumer behaviour while purchasing different commodities in the competitive business environment. For example, Samsung has a wide range of offerings in the market, such as high tier; Galaxy S22 Ultra, Galaxy Z Fold 3 etc. These also come under the flagship segment of Samsung. In addition to that, low budget phones such as Galaxy 12, M12, A12 etc., are some of the varieties that are being offered by Samsung (Abraham, Murali and Mtegha, 2020). In comparison with Apple, it can be identified that Apple only has one series, which is the iPhone series.
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Variation
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A variation involves the change in the level of demand over a period of time because of external factors. There are some factors that can create difficulty in forecasting the variation. The customer's demand in this competitive environment and the constant change in taste and preferences of the consumers in this dynamic environment contribute to the formation of high variation in the level of demand (Priyono, Moin and Putri, 2020). Apple conducts business operations in an environment where new technological tools and equipment keep unlocking new possibilities.
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On the other hand, in the case of Samsung, it can be recognised that the variation is also high since both Apple and Samsung are part of the technology industry where new advancements take place rapidly. In 2019, Samsung introduced the 5G network in smartphones and also managed to win the “smartphone market competition” (Haizar, NFBM et al., 2020). This is one of the examples of variation in the case of Samsung.
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Visibility
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Visibility refers to the company’s value chain that can effectively show all the processes. Apple is the most popular brand on the whole globe, and the visibility is very high for the apple products (Iancu and Iancu, 2018). Apple put huge financial resources to develop the product and also for designing the product distinctively. These features are very visible to the customers.
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On the contrary, Samsung is also one of the big players in the technology industry. The visibility is also high for Samsung products (Kang, 2018). The end products with distinct designs and unique creations of Samsung that are visible to the customers.
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4. Examination of how operational performance in Apple might be improved
As discussed above, Operations management involves the different business practices that help the business in the creation of maximum efficiency level in any business organisation such as Apple. Operational performance is also one of the key factors that aid the business organisation to measure the performance of the business operations. Currently, it can be recognised that Apple is providing a wide range of offerings starting from digital streaming services to distinctly creating products like Mac, iPhone series, Apple watch and many more to come in the future that will be heavily dependent on the new technological advancements. Therefore, there is a requirement of identifying the core competencies of Apple. Furthermore, apple as a brand emphasises giving a secure and safe experience to the customers buying the Apple products (Stute et al., 2019). Therefore, the security protocols in their electronic devices have become one of Apple's core competencies. This is one of the aspects that contribute to Apple's effective operational performance, and it can be doubled down in the future to differentiate it from other competitors.
One of the highlights behind the effective operational performance of the business organisation is its industrial level of quality that the company is consistently maintaining. Its huge emphasis is on carrying the product while maintaining all the quality standards of the company (Razak et al., 2020). However, in recent times, it can be observed that the company is not producing something drastic and distinctive in the market since it is not reflected in their revenue generation. Instead, the company is walking the path of limited innovation and creativity. Furthermore, to remain effective and efficient in maintaining the quality operational performance, it is required that Apple must concentrate on concentrate on developing more warehouses for uncertain events, especially in a time of the ongoing pandemic; more warehouses can aid in keeping the operational performance positive (Becerra, Mula and Sanchis, 2022).
Currently, it can be observed that Apple is utilising the “Uni-Country approach”, limiting the company in providing continuous production and keeping its apple products available to the majority of the customers worldwide. The multi-Country approach can aid in overcoming the problem since it can enable the Apple company to continue production without any disruption (Hoffmann, Yin and Hoffmann, 2020). Apple must also be ready for futuristic delivery options such as drone delivery, which Amazon is regularly testing to make a reality. To improve the operational performance consistently, Apple must remain true to its vision no matter what, since staying true to its vision can enable the company to innovate and launch new smart devices that can provide the first-mover advantage. Previously, Apple has contributed and set so many trends in the technology industry, and therefore, this path can be very beneficial in improving the overall operational performance of Apple.
In addition to that, Apple must start using prescriptive analytics that can help the company in forecasting the different trends of the market while also deciding the best pathway to get a competitive advantage with the help of using the information and from the prescriptive analytics (Gim, Lee and Joo, 2018). In terms of the supplier, Apple has only one or two suppliers, which need to be expanded since it can result in redundancy in the supply chain network. In addition, having only a few suppliers can also increase the bargaining power of suppliers.
5. Conclusion
This individual report has come to an end. It can be concluded that Operation Management is among the critical and vital components of the business organisation in accomplishing different goals and objectives for carrying out the business operations. Apple was chosen for the individual report, and it can be observed how relevant the operation management decisions play a critical role in shaping the business organisation. The operations management such as Quality Management, Inventory Management, the layout or Process Design is discussed and demonstrate how decisions like quality management are essential in controlling the quality as well as managing the quality; managing the inventory is also very critical in maintaining the stocks and fulfilling the stocks effectively and efficiently.
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