Operations Management - iPhone Supply Chain Management and Networks Free Essay Example, 2500 words

For example, it has been submitted that Apple’s continuous diversification and horizontal integration of effective supply chain management has cemented its position as a central digital player and thereby enhances brand value: â€Å"Competitive advantages such as brand recognition can last a long time and may take a few years to deteriorate† (Hitt. , Black. , & Porter, 2005). If we consider this in context of the 21st century business model, Schumpeter’s proposition clearly remain relevant to operations management and the supply chain network. For example, the manufacturing and service industries are characterised by short product life cycles and large budget requirements for research and development, fuelled by changing consumer habits and requirements (Smith, R.D. 2006). Schumpeter further distinguished between different types of innovation through the creation of novel combinations using existing knowledge, for example the iPhone, which is further evidenced by its sales figures. When the Apple iPhone debuted, it sold 270,000 units at a pace of 150 per minute in thirty hours, each price before contract fees at 499 -599. By early September, the sales had crossed the one million mark, which far outstripped the adoption rate for the original iPod. We will write a custom essay sample on Operations Management - 'iPhone' Supply Chain Management and Networks or any topic specifically for you Only $17.96 $11.86/pageorder now Apple then cut the iPhone’s price by $200 and the price doubled (Trebilcock, 2007). By the year’s end, industry analysts predicted that global consumers would have purchased three million iPhones, with an approximate further seven million in 2008 (Trebilcock, 2007). Moreover, in 2007, Apple finished the year in its fiscal fourth quarter with record revenue and profits. It has been submitted that a central element of this success is logistics management and understanding of the global supply chain (Trebilcock, 2007). Indeed, in the annual supply chain top 25 report 2007, AMR Research praised Apple for superior supply chain capabilities with the iPhone and performance, ranking the consumer maker second in a list of retail and manufacturing heavyweights (AMR Research, 2007 available at www. amrresearch. com/supplychaintop25). From practical perspective, prior to sales of iPhone, it was considered an innovative victory of design and functionality and brand value (Trebilcock, 2007). As with other products such as Xbox, PlayStation3 and Wii, analysts expected shortages when phones went onto sale but this didn’t happen and it has been argued that this pertains to the triumph of the supply chain management as emphasised by Michael Levi, director of operations and solutions strategy at i2 Technologies (quoted in Trebilcock, 2007).