Logistics Planning and System Design
Logistics Planning and System Design
Logistics has always been an integral part of a business operation that involves constant distribution of goods and supplies. Modern logistics practices have changed how the goods and services are being distributed in various channels and introduced practices that are not only cost-efficient but strategically effective. Analytical, operative and management of logistics networks are central to the efficiency of supply of goods in at the right place and at the right time. Modern logistics planning is also relative to analytical methods that constitute optimal utilization of networks and systems, planning and developing strategies. Several large firms are engaged in proven strategies that roll out the foundation for the development of solutions for multitude of logistical problems. Apple Inc. for instance is incorporating analytically derived formulas and algorithms that can be used for computer based planning of comprehensive logistical system. This strategy encompasses dynamic scheduling solutions of picking up orders and distribution of resources within the supply network.
Apple Inc’s procurement, manufacturing and logistics have enabled them to execute monumental product launches while avoiding maintaining large inventories at hand. One of the most effective logistical strategies that Apple Inc. is leveraging on is to contract various offshore manufacturing facilities. During the 1990’s Apple has limited their manufacturing operations within the United States. However, the company realized that in order to obtain a profit margin of 40% they need to cut down the cost of transporting their raw materials and finished goods from the US to the global market. Therefore, the best solution possible is to employ manufacturing facilities as near as possible to their distribution channels (Securities and Exchange Commission, 2011). The monumental task of overseeing the entire process and flow of goods within their distribution network is aided with sophisticated tracking technology that allows them to keep the product launches in complete secrecy and demands at peak.
The company’s logistical planning involves manufacturing and supply of key components sole-sourced by outsourcing partners in the United States, Europe and Asia. The next step of the plan is to be performed by outsourcing partners in Asia that will take care of the final assembly of the hardware components. Most of the logistical partners contracted by the company are located in Asia. Having the final assembly done is Asia; it is only feasible to ship the finished goods straight from the same location going to the different destinations in Asia as well. The same strategy is being implemented in Europe and United States. What sets Apple Inc. apart from its competitors is their ability to manipulate the demand supply of their products by means of launching plans with attached extreme secrecy. Their logistical strategy incorporates a complex tracking system beginning from the placement of electronic monitors in boxes in order to track the products while being transported. For example, when a box of iPhone is being shipped from their headquarters in Cupertino, an electronic tracking device is included in the box and their tracking system will ensure that the box is in route to its destination on time and without hassle (Banker, 2012). As soon as the tracking system detected the box to be out of the intended route, the company is being alerted and security measures will take effect. This strategy is essential to their goal in discouraging leaks and ensuring that the customers will continue to delighted and surprised when their products eventually hit the market.
In conclusion, Apple Inc. is incorporating effective logistics planning by means of outsourcing manufacturers in key locations around the world where their major markets are also situated. In addition, Apple Inc. is also making use of sophisticated tracking system that does not only protect the products from leakages, but will also ensure the integrity of brand as one of the most sought in the industry. Logistical planning employed by Apple and its integrated allowed the company to focus on meeting their profit margins and keeping the cost of logistics and inventory at the minimum.
References
Baker, S. (2012, July 2). The Apple Supply Chain: The Best in the World? Logistics Viewpoints. Retrieved December 22, 2012, from http://logisticsviewpoints.com/2012/07/02/the-apple-supply-chain-the-best-in-the-world/
Securities and Exchange Comisssion (2011, September 24). Form 10-K. U.S. Securities and Exchange Commission. Retrieved December 22, 2012, from http://www.sec.gov/Archives/edgar/data/320193/000119312511282113/d220209d10k.htm
