Project and Operations Management in Apple Inc - Case Study Example

Operations and Project Management Introduction Running a business entails undertaking various tasks that span from managing human resource, marketing, and inventory management, among others. However, the scope of such tasks depend on the size of the organisation and therefore, bigger organisations that have wide branch network are characterized with various tasks unlike smaller organisations that operate from just one premises. This is to say that that task of managing a bigger organisation is much complex and hence the reason why most organisation apply the principle of division of labor, which creates various positions of line managers and even supervisory positions in order to ensure effective management. Depending on the nature of an organisation and even its size, some of the daily activities that organisations undertake include capacity control, process design, quality management, inventory management, project management, operations strategy, new product development, operations performance, and facility location and layout design. In this present essay, the Apple Inc has been selected as the case study and the study seeks to examine how Apple Inc treats some of the tasks that have been listed above. It is important to note that the five tasks that will be selected for discussion are unique to the nature of Apple Inc’s business and the fit with its target market and overall business model. In general, the essay is aimed at displaying the level of knowledge of various tasks or activities of development and growth that undertaken within a multinational organisation such as Apple Inc. Apple Inc Apple Inc. specializes in the designing, developing, and selling of personal computers, computer software, and other consumer electronics. According to Jeffrey and William (2005), the company was first established in 1976 and its co-founders included Steve Jobs who was a key figure of the company and rose to become an influential American Icon until his sudden death Lusted (2012) stated that Apple is revered for its distinctive products that include the Mac brand of computers, the iPad, the iPhone, and the iPod, among others. Apple Inc is ranked at position three in the mobile phone industry and currently, the company is valued over GBP 432 billion, and it has presence in fourteen countries with more than 400 retail shops across the countries where it operates. Additionally, it serves its customers through the iTunes store and Apple store, which are online platforms of the company. The current chair of the board of directors is Mr. Arthur Levinson while Mr. Tim Cook is the current chief executive officer. It is of essence to note that Apple Inc has other subsidiaries companies that include the Anobit Company, FileMaker Inc., and Braeburn Capital. Apple Inc’s operations strategy To begin with Heizer and Render (2013), described operations as the processes or activities that are involved in different stages of product development up to the delivery stage of the final product or service to the consumer and therefore, these processes are the operations of the company. In regards to operations strategy, Kamauff (2009) described it as a plan that is put into action by a company and it stipulates how the company will utilize its resources in the production of a service or a product. Stevenson (2011) further added that operations strategy is a tool or framework that stipulates how a company performs its functions or activities and it supports the company’s corporate strategy. So far, Apple Inc has been able to record great success in the market thereby indicating that it has a well defined and elaborate operations strategy that is able to make the company more competitive. One of Apple Inc’s core operations strategies is quality production at a cheaper price and hence the reason why the company has outsourced most of its business processes abroad where employees are more skilled than their counterparts in America and labor is cheaper. This operations strategy supports the corporate strategy of the company, which is delivering quality and affordable products to the market. The other core operations strategy of Apple Inc is the micro-division of labor and specialisation. Under this strategy Apple Inc., emphasize on the fact that an employees should only perform tasks of which he or she has mainly specialized on. For example, back in 2011 when Ron Johnson was the senior vice president of retail operations he was only in-charge of store layout, site selection, and in-store service while the chief operation officer who at that time was Tim Cook and had a background in supply chain management was in-charge of inventory management (Lashinsky (2012). This operations strategy promotes specialization and micro-division of labor, which in turns improves the quality of work. Apple Inc’s operations performance According to Lai (2013), operations performance is simply the measurements of company performance against the standards that it had previously set or the industry standards. Operations performance focuses on certain indicators of efficiency, effectiveness, cycle time for inventories, creditors repayment and payment to debtors, waste reduction, and compliance to the laid out regulations. With reference to the studies conducted by Luftig and Ouellette (2012), it is noted that business organisations usually employ certain financial ratios in order to measure or test the level of operations performance. These ratios test different indicators and they are able to identify whether the company’s performance is beyond or below the standards that it sets or the industry ratios. Basic indicators of Apple Inc’s operations performance are its market capitalization which in excess of GBP 432 billion and by last year it had the highest nominal market capitalization that has ever been recorded by a company at a stock exchange in the U.S (Lashinsky, 2012). Another indicator of Apple’s operations performance is its hugely competitive share price at the New York exchange that average between GBP240 to GBP 262. According to Hensen and Lamberts (2011), a company’s profitability is the single most significant indicator of operations performance and in the previous year, Apple Inc recorded total revenue of GBP 102.62 billion and a profit of GBP 27.36 billion indicating that its performance is above par. Apple Inc’s new product development Karol and Nelson (2007) defined new product development as the complete process of developing a new product or service. New product development might involve the creation of a very new product that is not available in the market or it might involve the creation of a product that is an improvement of another version of the product, which is currently available in the market. According to Lusted (2012), Apple Inc has recorded tremendous success over the past few decades because of its unique sense of new product development that has seen the company deliver revolutionary products to the market. For example, on the September 2012, Apple launched the iPhone 5, which is a 6th generation iPhone and it made sales of over 2 million within 24 hours after its official launch and this affirmed that the company has an effective product development strategy. From a preview of the list of Apple Inc’s products and services it is evident that the company’s process of new product development involves the development of a product or service that has unique, advanced features and capabilities when compared to previous versions/ models that were developed by the company. In other instances, the company develops a new product or service that is not rivaled in the market thereby giving the company an instant competitive advantage. Thirdly, the company can engage in the development of new products or services that are sets to create a niche market and favorably complete with other rivals. For example, the development of iOS was aimed at creating a niche market in the operating system industry to rival the dominant Microsoft operating system. Apple Inc’s facility location and layout design In the writings by Lewis and Payant (2007), they wrote that facility location and layout design of a business premises are supposed to support the corporate strategy and image. Therefore, location and layout design should be able to improve a company’s competitive advantage. They further wrote that facility location is part of the wider marketing strategy and it is covered under the element of place that aims at availing the product or service to a location that is convenient for the customer. Barrett and Baldry (2003) added that in the process of locating facilities, the personnel in-charge mainly considers the availability of the target audience within the locality where the facility will be located. In Apple Inc, the senior vice president of retail operations is responsible facility location and layout design. Therefore, this office was responsible for locating the 406 stores that Apple has in 14 countries and even designing the layout of the physical store to ensure that it resembles the corporate culture and the seasonal theme of the company. It is beneficial to note that Apple stores have been located at strategic locations where they have great visibility and the layout design inside the stores enables customers to glance at different products of the company as well as practically use them to test their efficiency and performance. According to Cotts et al. (2009), the function of facility location and layout design can be done effectively with the collaboration of the marketing department because the location of a facility is supposed to make it easy for the customers to access the products and services. In addition, the layout design of the physical facility should further incorporate promotional messages or advertisements in order to support marketing efforts. Apple Inc’s quality management According to Hoyle (2007), quality management is that process of managing tasks and activates that are aimed at ensuring products and/ or services achieve a desired level of excellence or standards that have been set by the industry regulator. Ireland (2007) further added that quality management covers other three critical areas that include quality improvement, quality assurance, and quality control. Because of the fact that Apple’s Inc has outsourced most of its business process, quality management within the company has become a challenging task and there have been numerous cases where customers have complained about the quality of Apple’s products that exhibit technical problems even after immediately being purchased. According to Lashinsky (2012), the company has tried to revamp its quality management by ensuring that contracted manufactures send a compliance reporting indicating that the products being delivered have satisfied the quality standards set by the company. The second, stage of quality management occurs at the physical store when a customer goes to buy an Apple product and/ or service. At the store the staffs tests the quality of the product in the presence of the customer in order to validate that it meets the set quality standards. Conclusion From the research and discussion above the there are two conclusive facts that have been noted and one of them is the fact that the certain activities are only confined to a certain organisation because of the nature of their business as well as the size. Second fact is that multinational organisations are characterized by various activities of development and growth, which require specialized management strategies. References Barrett, P. and Baldry, D. (2003). Facilities Management: Towards Best Practice: Wiley-Blackwell Publishers Cotts, D. Roper, K. and Payant, R. (2009). The Facilities Management Handbook. AMACOM Publishers Heizer, J. and Render, B. (2013). Operations Management. (11th Edition). U.S: Prentice Hall Hensen, J. and Lamberts, R. (2011). Building Performance Simulation for Design and Operation. London: Routledge Publications Ireland, R. (2007). Quality Management for Projects and Programs. U.S: Project Management Institute Jeffrey, Y. and William, S. (2005), iCon Steve Jobs: The Greatest Second Act in the History of Business, John Wiley & Sons, Hoyle, D. (2007). Quality Management Essentials. London: Routledge Publications Kamauff, J. (2009). Managers Guide to Operations Management. U.S: McGraw-Hill Karol, R. and Nelson, B. (2007). New Product Development for Dummies. U.S: For Dummies Publications Lai, R. (2013). Operations Forensics: Business Performance Analysis Using Operations Measures and Tools. U.S: The MIT Press Lashinsky, A. (2012). Inside Apple: How Americas Most Admired--and Secretive--Company Really Works. U.S: Grand Central Publishing Lewis, B. and Payant, R. (2007). Facilities Managers Maintenance Handbook. McGraw-Hill Publishers Luftig, J. and Ouellette, S. (2012). Business Performance Excellence. U.S: Bloomsbury Academic Lüsted, M. (2012). Apple: Company and Its Visionary Founder, Steve Jobs. U.S: ABDO Publications Stevenson, W. (2011). Operations Management: Operations and Decision Sciences. (11th edition). U.S: McGraw-Hill/Irwin Read More