Apple isn’t the first electronic company to outsource jobs like manufacturing of electronic devices. What is Offshoring? Our book says that offshoring is different from outsourcing. This is because Apple moved their factory overseas. Offshoring is when “a company takes one of its factories that it operates and moves the whole factory off shore” which in this case Apple has moved their manufacturing factory from America to china.
Offshoring has become a common practice amongst major companies. Apple is a huge and thriving company in the world. I’ll continue to discuss how offshoring helped Apple grow.
Apple Inc. was founded in Cupertino California on April 1, 1977. Apple makes phones, computers and software. They also offer online services. Apple is known for its iPhones, Macbooks, iPads, Apple TVs, Apple watches, and Apple TV. Some of the products they have created include MacOS, iOS, and Apple TV. Apple’s online services include the iTunes Store and Apple Music, the Mac App Store as well as iCloud. Steve Jobs and Steve Wozniak founded the company. Ronald Wayne was a co-founder. Apple 1 was launched in 1976 and brought huge revenue. Apple went public on 1980. Jobs started NeXT in 1985 after Wozniak quit Apple. Michael Spindler was appointed Apple’s new CEO in 1993. His only success, however, was the migration of the Mac OS to PowerPC. The company was not able keep up with the competition and had a hard time selling their inventory. This caused them to fall behind their competitors and their finances to plummet. Apple bought NeXT for Jobs to return to the company in 1997. Jobs became its CEO shortly after. Jobs returned to Apple in 1997 and began the process of rebuilding it. Jobs negotiated with Microsoft for the Mac OS license and the iMac was born shortly after.
Steve Jobs has built Apple into one the most successful companies in history. Apple opened its first shop in 2001, and shifted focus towards consumer electronics by 2007. Apple’s worldwide revenue in 2017 was $229 billion, with 123,000 workers and 504 stores. Apple’s supply-chain is one of the most advanced in the world. The fact that Apple has made maintaining good relations with its suppliers a top priority over the past few years has played a major role. According to NC State University the term supply chain is defined as “the management and coordination of supply-chain activities to maximize value for customers and to achieve a competitive advantage”.
Apple has been able to dominate the market by taking over some third-party businesses. The company can also reduce costs by purchasing the raw materials of their products in different places and sending them to China where they are assembled. Apple has over 200 suppliers. Apple also uses different technologies and tactics to track their stock, which is a way to save money and ensure that the quotes they receive from suppliers are accurate.
Apple has also forced suppliers to compete among themselves, which in turn helped reduce the cost. Apple insisted that all raw materials must be shipped to their assembling plants located in china, even if they came from anywhere. The materials were easier to understand since the majority of them came from China. Apple has a good inventory management system.
Inventory turnover can be calculated by dividing cost of goods sold by average inventory. This measurement is useful when determining how efficient a business is in its sales. In 2013, “Days in Inventory”, the number of days that their products remained in stock, was calculated at 4.37. However, in 2018, inventory turnover reached 4.83. Tim Cook stated that “inventory” was a bad thing. Tim Cook stated that the technology value diminishes as a product ages. Apple is one of many companies that compete with Samsung. Therefore, it is crucial to move the products. Apple’s Tim Cook also reduced the number of warehouses they used to store their products. Sam Holder, an Apple Insiders employee, said that Cook “shut 10 of the 19 Apple Warehouses to limit the overstocking. By September 1998 the inventory (on-hand) had decreased from a monthly to six days”.
Apple’s Supply Chain has recently come under some criticism, but it still remains strong.
They may have more inventory than is required
Based on the World’s economy, the company will be affected.
Other manufacturers’ products may be sold by their resellers
Apple began manufacturing overseas in 2004. Why? Apple can make more money by manufacturing iPhones in China. The cost is $8, which is a lot less than what it costs to manufacture in the United States. Tim Cook recently stated that the Chinese people were the reason they liked to be in China. China is a country of extraordinary talent. China is home to almost two million iOS app developers. The apps are among the most innovative in the industry, and their entrepreneurs are some the most entrepreneurial and inspiring in the entire world. They are exported worldwide. Displays are manufactured by LG Display in South Korea or Japan Display. Taiwan is the place where Touch ID sensors are manufactured. China factories are reported to have much larger facilities than US-based factories. Many workers live in the factories, which made it possible for them to arrive at work on short notice. They also made it simpler to hire workers. China has many more engineers and technical workers than the United States. The majority of them don’t hold a large number of certificates, but just enough to show that they are qualified and don’t need high salaries.
Offshoring iPhone Production has allowed Apple to reach markets much faster. This explains why the iPhone comes out almost twice per year. Foxconn is one of Apple’s largest and most important manufacturers. Foxconn has its main facility in Longhua. This is near to where most of the materials used for their products are manufactured. It is impressive that they have 920,000 employees in China and 25 factories. Foxconn was the scene of a number of scandals involving the underpayment of wages to their employees, excessive overtime for their workers and even the presence of children in their factories. Workers were once paid $17 for a 12-hour day, which was ridiculous.
China reportedly spent billions on Apple’s products. Foxconn’s headquarters are in Zhengzhou. “iPhone country” is in Zhengzhou. Zhengzhou reduced corporate taxes by 50% after the first five-year period. The city also allowed companies to pay workers less. The offshoring by American companies has caused a lot of concern. Many Americans have jobs, but no jobs. This has prompted scrutiny on Apple and other companies. The company has also come under scrutiny for its ethical practices. Apple, however, continues to be a top competitor in the technology industry.
Apple continues to be a leader in the industry despite these challenges.