With its headquarters in Cupertino, California, Apple Inc. is a multinational technology company that specializes in designing, developing, and selling computer software, consumer electronics, and provision of various online services. Alongside Google, Facebook, and Amazon, Apple Inc. is considered to be one of the biggest technology companies in the world (Rivas 2017). Some of the hardware products developed by the company include the iPad tablet computer, the iPhone smartphone, Apple TV, among others. IPadOS and iOS are among the software developed by the company. The online services provided by Apple Inc. include iTunes, iCloud, Apple Pay, among several others (Griffin 2017). It was founded in 1976 by Steve Jobs, Ronald Wayne, and Steve Wozniak. Today, the company boasts of more than 500 retail stores in different parts of the world. It employs more than 130,000 people and recorded a revenue of $265.595 billion in 2018 (Apple Inc. 2018). To effectively and profitably manage such a huge company, the leadership at Apple Inc. must have mastered the art of operational management over the years.
Before delving into the role of operational management to the success of Apple Inc., it is essential to understand what operations management is first. Operations management can be described as the field of management that deals with designing and controlling the process of production. It is also concerned with the redesigning of business operations in a way that creates the highest level of efficiency in an organization (Heizer et al. 2017). It ensures that labor and materials are converted into services and goods most efficiently to minimize the costs and maximize the profits. Operations management also deals with different strategic issues such as the determination of the project management methods, size of the manufacturing plants, and information technology networks to be implemented. Maintenance of policies, management of inventory levels, materials handling, and quality control are also operational issues (Ketokivi and McIntosh 2017).
Though operations management has its root in manufacturing, it became integrated into other corporate functions such as product management as economies around the world became more service-based (Haksever and Render 2017). Over time, it has become a multidisciplinary functional area in organizations. It incorporates other disciplines such as equipment maintenance management and general management. Due to the complexity of the field, an operations manager must understand strategic policies, production, and manufacturing systems, cost control principles, as well as basic material planning. Recent trends in the market, such as an increase in environmental concerns, shrinking product-lifecycles, and the digitalization of different processes are increasingly calling for innovative approaches to operations management (Hitt, et al., 2016). Having discussed operations management, this paper will now focus on operations management at Apple Inc.
Key Responsibilities and Practice of Operations Management at Apple Inc.
A look at Apple's profits margins and consumer base confirms the high efficiency of the company. This is as a result of robust operation management policies. Since its establishment in 1976, the company has been committed to offering quality services and products to its customers around the world. Through the years, the company's operation strategy has been to introduce new products to the market consistently. This has enabled the company to gain an innovative and competitive advantage over its rivals (Khan et al. 2015). Operations within the company are primarily dependent on political and economic factors in the operating environment. By coming up with appropriate strategies, the company has managed to overcome these challenges. The operations management within the company has also largely contributed to this.
The primary operational management functions at the Apple Inc. include communication services as well as support to distribution of products to various suppliers and retailers. The primary responsibility of the operations management at the company is to streamline the business operations without compromising the value of the company. To achieve these, the operation managers are required to adhere to the principles of management by discharging their duties honestly, ethically, and within the confines of the existing laws and regulations. For instance, the operations managers are required to make laws and implement them in compliance with the company's mission and vision statements (Rowland 2019). The policies developed must also be reflective of the prevailing business environment. Some of the policies formed by the operation managers include employee safety regulations, policies on expected performance and employee retention, among others.
The operations management team is also charged with solving problems in the company when and where they arise. The operations managers are therefore expected to use their multidisciplinary skills to come up with strategies to solve any organizational problem that arises, especially those that relate to business operations. In an unpredictable and volatile industry, such as that that Apple Inc. operates in, problems are bound to arise. The vast size of the company also raises various operation problems. For instance, delay in shipment of the company's products to its international markets is an example of problems that arise as a result of its extensive operations. The operation managers are supposed to make fast decisions to address these problems when they arise (Kumar et al. 2017).
Operations management at Apple Inc. also involves management of the finances allocated for different operations. Positive utilization of these finances has contributed immensely to the success of the company over the years. Proper management of the operational costs has also helped the company remain profitable. To promote optimization of spending within the company, the operation managers are tasked with the preparation of periodical budget reports which are then presented to the senior management of the company. Through the collection of information on growth, sales, and profits, the operation managers can make business forecasts and hence come up with strategies to enhance efficiency and minimize operational costs (Bromiley and Rau 2016).
Communication between the various stakeholders is of great importance to an organization. To accomplish the various business processes, the operation management team at Apple Inc. ensures a smooth flow of information. Resultantly, operations such as the delivery of goods to the global market are carried out seamlessly. Operation managers are also supposed to manage logistics. They analyze the existing logistics and then decide on whether any improvements should be implemented. For instance, they should ensure that the equipment used in the production process meets the industry standards.
The operations managers at Apple Inc. are also involved in the design of different products, services, and processes. In coordination with other departments of the company, they ensure that the designs of various products and services meet the standards that the company strives to maintain. They also ensure that the processes increase efficiency by optimally utilizing the resources available in the company (Prajogo et al. 2018). Other than these responsibilities, the other activities carried by the operation management team are discussed in greater detail in the section below.
Operations Management Activities at Apple Inc.
Operations management consists of ten decision areas that must be adequately addressed in an organization. At Apple Inc., the decision areas are implemented carefully and in coordination with other business areas to ensure the efficiency of operations. The operational efficiency has also helped the company overcome competition from worthy rivals such as Sony, Microsoft, Amazon, Google, among others (Rowland 2019). The decision areas relate to activities such as quality management, product design, location strategy, inventory management, capacity and process design, among others. The company has a team of senior managers tasked with the implementation of the ten decisions. The ten decision areas are discussed in detail below.
As mentioned earlier, the quality of Apple's products has contributed significantly to the company's competitive advantage in the highly competitive industry (Payne 2017). This decision area focusses on quality controls and standards. The senior vice president for operations at the company works with other senior vice presidents to ensure that the quality standards are complied with. The holistic approach adopted ensures that this decision area is adequately addressed (Rowland 2019).
Design of Goods and Services
Various organizational elements and officials at Apple Inc. handle design processes at the company. For instance, the senior vice president for Mac Software Engineering and the senior vice president for Mac Hardware Engineering are involved in the design, development, and production of the Mac computers (Rowland 2019). The vice presidents coordinate with the senior vice president for operations. The high level of coordination regarding design and development ensures that efficiency is enhanced in this decision area.
This strategy is particularly crucial to the company due to its scale of operations. To increase efficiency, the company is highly selective regarding the location strategy. It features limited authorized sellers, mostly located in urban areas to optimize brand exposure and foot traffic. The strategy has been highly successful since the company's stores around the world are profitable. The selective location strategy, therefore, has adequately satisfied this decision area (Rowland 2019).
Layout Design and Strategy
In an industry where the cost of shifting from one seller to another is so low, all the players must strive to meet customer expectations. The layout design used by Apple Inc. is meant to achieve this. Apple stores are spacious and feature minimal decor to increase the focus on the company's products. In other facilities in the company, innovative office layouts that promote creativity and the efficiency of workflows are adopted (Rowland 2019).
Process and Capacity Design
To enhance efficiency in product development and design, the company's human resource management strategies are aimed at maximizing workforce capacity. The company has also heavily invested in innovation as a way of optimizing the efficiency of capacity and process. Working closely with suppliers also helps improve the efficiency of process and capacity operations. For example, the suppliers are required to adhere to the Apple supplier code of conduct. By using this comprehensive approach, the process and capacity design decision area are adequately covered (Rowland 2019).
Job Design and Human Resources
This decision area calls for human resource and job design strategies that respond to the market and industry trends. Steve Jobs' strategy that focused on excellence has traditionally been used in the company. However, a shift to human resource strategies that create a more sociable environment to increase the morale of the employees has been embraced in recent years (Rowland 2019). However, this has not affected the company's industry leadership.
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