Pa n m o re I n st i t u te
BUSINESS, MANAGEMENT
Apple Inc. Operations Management: 10
Decisions, Productivity
UPDATED ON FEBRUARY 19, 2019 BY CHRISTINE ROWLAND
Apple Inc.’s operations management (OM)
involves the application of the 10 decisions
of OM to ensure that all aspects of the
business are running smoothly. In operations
management, the 10 decisions relate to
such aspects as product design, quality
management, process and capacity design,
and location strategy, as well as inventory
A close-up of an Apple keyboard. Apple Inc.
management, among other operational
addresses the 10 decision areas of operations
areas. In Apple’s case, the 10 decisions of
management through different managerial
operations management are carefully
channels. The company also satisfies necessary
implemented through coordinated efforts in
OM decisions to optimize its productivity. (Photo:
Public Domain)
product design and development, sales and
marketing, and the firm’s supply chain, along
with the company’s other business areas.
With considerable leadership in the computer technology and digital content
distribution industries, Apple Inc. is an example of success in addressing the 10 decision
areas of operations management. Operational effectiveness and strategies involving
technological innovation help the business thrive, in spite of competition involving Dell,
Lenovo, Microsoft, Sony, Google, Amazon, Samsung, Walmart, and other companies.
This success highlights the importance of Apple’s strategic approaches to achieve high
productivity goals and objectives in operations management areas.
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Apple Inc. has a dedicated team of senior managers, each of which handles the
implementation of measures to address the 10 decisions of operations management.
The company has excellent performance in maximizing efficiency in operations
management. This operational efficiency translates to competitive advantages and
capabilities that fulfill strategic objectives, ultimately leading to the achievement of
Apple’s corporate mission and vision statements.
Apple Inc.: 10 Decision Areas of Operations
Management
1. Design of Goods and Services. Apple’s processes in the design of its products are
handled through a number of organizational components and officials. For example, the
development and production of Macs involve a Senior VP for Mac Hardware
Engineering and a VP for Mac Software Engineering. This coordination reflects the
nature and characteristics of the corporate structure of Apple Inc. In this decision area
of operations management, these VPs coordinate with the company’s Senior VP for
Operations. The system of interactions ensures that the outputs in this operational area
are successful in making Apple excel in the design of its technological products.
Strategy to
Execution
2. Quality Management. This decision area of operations management emphasizes
quality standards and controls. Apple Inc.’s Senior VP for Operations coordinates with
eight other Senior VPs to ensure compliance with the company’s quality standards. The
company is known for high quality standards that permeate different areas of the
business, including product design and development, retail, marketing, online sales,
industrial design, and human resource management. Thus, Apple has a holistic
approach in ensuring quality to address this decision area of operations management.
3. Process and Capacity Design. Apple’s human resource management strategies
include support to maximize workforce capacity for product development and design.
In addition, the company works with suppliers to ensure efficient processes and
adequate capacity in this decision area of operations management. For instance,
suppliers are given directives for process design, as well as the Apple Supplier Code of
Conduct to optimize their human resource management. Moreover, Apple Inc. strives
for innovation in its facilities to optimize capacity and process efficiency. Thus, the
company has a comprehensive approach for this decision area of operations
management.
4. Location Strategy. Apple Inc.’s location strategy is selective, involving limited
authorization of sellers. However, most authorized sellers are located in urban centers
to maximize foot traffic and brand exposure. At present, the company has hundreds of
stores in more than 20 countries around the world. Despite this limited approach to
seller authorization, the company is now among the most profitable in the world, and
Apple Stores have the highest revenue per square foot of retail space in the United
States. Thus, Apple’s selective location strategy successfully satisfies this decision area
of operations management.
5. Layout Design and Strategy. Apple’s layout design and strategy emphasize
customer expectations. For example, company-owned and authorized-seller stores are
spacious with minimal décor to ensure focus on Apple products. In the company’s other
facilities, this decision area of operations management is addressed through innovative
office layouts that encourage creativity and efficiency of workflows. Creativity is a
critical factor among employees involved in product design and development
processes at Apple Inc.
6. Job Design and Human Resources. This decision area of operations management
requires job design and human resource strategies specific to the trends in relevant HR
management needs. In Apple’s case, job design and HR strategies are based on Steve
Jobs’ original emphasis on excellence. However, the company has been gradually
changing its HR strategies under Tim Cook to reflect a more sociable workplace for
optimum employee morale. Apple Inc. has mastered job design and human resource
strategies to ensure continued support for its industry leadership.
7. Supply Chain Management. Apple’s supply chain is among the most efficient and
streamlined in the world. To address this decision area of operations management, the
company uses automation of processes and regular monitoring of suppliers. This
monitoring evaluates supplier capacity and productivity, as well as compliance with the
Apple Supplier Code of Conduct. The automation aspect serves as the main strength of
the corporation’s approach to supply chain management.
8. Inventory Management. In this decision area of operations management, Apple Inc.
uses different methods of inventory management, such as the serialized method for
effective tracking and control of products. The company also uses the first in, first out
(FIFO) method, which ensures that most old-model units are sold before new Apple
product models are released to the market. Apple Store managers also handle the
inventory management of their respective stores.
9. Scheduling. Apple Inc. applies this decision area of operations management through
a combination of automation and manual processes. Automation is used for scheduling
activities in the supply chain and production processes. On the other hand, manual
scheduling is used for individual Apple Stores and in some aspects of the company’s
offices. The main aim of the firm in this decision area of operations management is to
maximize the capacity utilization of facilities, equipment and human resources.
10. Maintenance. Apple Inc. addresses maintenance needs through dedicated
maintenance teams. For example, the company has different maintenance teams for its
various facilities. Apple’s IT teams also function as maintenance teams for the firm’s
servers and other IT assets. The VP for Human Resources ensures that the company’s
personnel are always at adequate capacity to maintain high performance at the
company’s facilities. Thus, Apple effectively addresses this decision area of operations
management.
Productivity at Apple Inc.
Apple Inc.’s operations management monitors and evaluates productivity through
various criteria. The company’s global size and diverse activities translate to different
standards, benchmarks and criteria for productivity in different business areas. The
following are some of the productivity criteria in Apple’s operations management:
1. Revenue per Square Foot (productivity of Apple Stores)
2. Product Units per Time (productivity of suppliers and the supply chain)
3. Milestone per Time (productivity of employees in product development)
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TA G S : 1 0 D E C I S I O N A R E A S O F O P E R AT I O N S M A N A G E M E N T , A P P L E I N C . , C A S E
S T U D Y & C A S E A N A LY S I S , C L O U D C O M P U T I N G , C O M P U T E R T E C H N O L O G Y ,
C O N S U M E R E L E C T R O N I C S I N D U S T R Y , E - C O M M E R C E , O N L I N E D I G I TA L C O N T E N T
D I S T R I B U T I O N I N D U S T R Y , O P E R AT I O N S M A N A G E M E N T
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