History and Evolution of Apple and COFCO Operations and Supply Chains

Question:

Prepare a report which covers:History and evolution of Apple and COFCO operations and supply chains .Provide separately a current snapshot of Apple and COFCO global companies. Describe separately how Apple and COFCO achieved market share domination.Analyse separately the value chain, market forces and strategies used at Apple and COFCO. II. Compare and contrast Apple and COFCO (Approx. 2500 words). Managing their ‘strategic resources and operations’ to achieve a competitive advantage in respect to: sourcing of raw materials, global manufacturing strategy, their people, sustainability, global supply chains and logistics models through to delivering goods and services to customers.Interconnectivity of their strategic resources and operations to achieve a global supply chain advantage III. Sustainable operations and global supply chains at Apple and COFCO.Identify the criticality of integrated sustainability concepts around globalisation of inbound logistics, operations and outbound logistics at Apple and COFCO IV. Conclusion & the future at Apple and COFCO ).Identify the key issues that will require board and executive time in the future and Challenges confronting Apple/COFCO as they commence the next stage of growth.

It is known that COFCO and Apple are the two very successful and prominent companies in the global market. It is evident that there are various strategies that are implemented by both the companies in order to achieve the competitive advantage in the market. The strategies can be implemented in various operations of the organisation like the supply chain, marketing, human resource etc. Here the comparison and contrasting of the strategic resources and the operations of the companies can be done in terms of the sourcing of raw materials, global manufacturing strategy, their people, sustainability, global supply chains and logistics models through to delivering goods and services to customers. Interconnectivity of their strategic resources and operations to achieve a global supply chain advantage can also be discussed.

Sourcing raw materials is one of the critical activities that can help in benefitting the company. Here the strategies in terms of sourcing the raw materials can be discussed for COFCO and apple.

It is known that in present scenario, there have been changes in the value chain of COFCO. Their value chain has now extended in order to acquire the raw materials effectively. The organisation has understood the importance of sourcing of raw materials as it can impact the effectiveness of the supply chain of the company as well. In order to meet the needs of the consumers, the continuous stability of the supply of raw materials is ensured by the company. Thus they have extended the source of global supply channels by increasing the cooperation with the suppliers. They have entered into contracts with the suppliers in order to manage the volatility of the raw materials and the related goods. The plants of the company are strategically located close to the sales markets or close to the sources of raw materials and it optimised the value of the company by a low-cost production system.

Apple has also implemented various strategies for acquiring the raw materials in order to gain competitive advantage in the market. It is known that the raw materials are very important for effective operations of the company. It is evident that there are multiple suppliers of most of the essential components of Apple. But certain key components like application-specific integrated circuits, certain optic drives, liquid crystal displays are mainly obtained from a limited or single source of suppliers (BBC News, 2014). They have also entered into various forms of agreements with the suppliers so that the raw materials are supplied to the company on time. The company has certain degree of bargaining power and thus they are able to gain advantages in terms of pricing in the agreements. But in recent competitive market, it cannot be said that the company will gain similar benefits in the future and thus it can create a risk situation and that can affect the operating results and the financial condition of the company as well. The company has also decided to manufacture certain raw materials within the organisation in order to lower the dependency on the suppliers of the raw materials.

Current Snapshot of Apple and COFCO Global Companies

The global manufacturing sector is very important for the effective growth and development of the corporations. It is known that in recent economic scenario, the level of competition has increased significantly in each and every market. Thus it is necessary that the operations are conducted effectively.

The manufacturing strategy is also very crucial for the operational efficiency of the company. COFCO also ties up with most efficient manufacturers and caterers in the country. It is one of the biggest wheat processing manufacturers in China. COFCO has also built strategic partnership with the main customers and they have worked with the chain restaurants and food manufacturers who have potential in the market. Here it can be said that company is growing at a steady rate in the industry by applying effective manufacturing strategy. The company has an objective to expand value added products in the industry, especially when there are large numbers of competitors existing in the industry. Thus the main aim of the company is to increase the efficiency of the manufacturing process at a lower cost so that the revenue can be maximised. They have also implemented technologically innovative processes for increasing the operational efficiency of the organisation.

Apple has also implemented various strategies in order to increase the efficiency of the global manufacturing process. It is evident that Apple is one of the global corporations that have extensive operations in various countries. It is known that there are hundreds of manufacturing partners of the company all over the world and it also has one of the biggest supply chains on the planet (Supplier Responsibility 2014 Progress Report, 2014). The company is committed to opportunities expansion for the manufacturers and they are dedicated in providing fair and safe workplace for the manufacturers. The organisation has also taken initiative to improve the safety at the manufacturing plants (Investor.apple.com, 2014).

They also take care of the designs of the product and they implement manufacturing processes that are more environment-friendly while making the products. The company has implemented various strategies for increasing the efficiency of the manufacturing process and an audit of the manufacturing is done every year. Quality concern is one of the most important factors governing the manufacturing of the products.

It is known that human resource or the people are one of the critical success factors of an organisation. Thus it is very important to manage the human resource of an organisation very effectively. In both the companies the people are managed effectively by implementing various strategies and they play significant role in the success of the organisation as well.

In COFCO, the people play a significant role in the success of the organisation at each and every level. The human resource department of the corporation controls all the external risks by forming various policies and implementing the planning for the human resource management of the organisation (Excellent food chain, quality products, 2010). Here the staff mobility and capabilities are taken into consideration and each and everyone has been assigned specific duties and responsibilities so that they can work effectively within the organisation. The policies that are implemented follow the regulations that are provided by the Chinese government. The people are hard-working and efficient and they are dedicated in the success of the organisation. The organisational culture is effective and the company has also implemented talent management and development projects for effective human resource management and so that the capabilities and skills of the people can be used effectively for the growth of the company.

Market Share Domination of Apple and COFCO

Apple is one of the leaders in the market and their strength is provision of good quality products to the consumers. It is known that technological innovation is one of the most effective strategies that are implemented by the organisation. Here the skills and the knowledge of the people for the research and development activity can provide significant benefit to the corporation. It is known that in Apple, high skilled workers are required for meeting the specifications of the demand in the market. The organisation has also implemented various policies and practices for managing the human resource in the organisation (Investor.apple.com, 2014). There is safety and health measures are also implemented for the employees. It is known that there is a cross-cultural environment that is evident in case of Apple as it operates in various countries and thus effective policies are also implemented for managing the human resource in different cultural context as well.

Now the comparison of both the companies can be done in terms of the sustainability of the organisations. It is known that sustainability is one of the major issues that is faced by the companies is recent years. It is very important to sustain the success of the organisational processes and to produce responsibly within the industry. It is known that the environmental concerns are increasing significantly in recent years and thus it should be taken into consideration by the organisations as well.

COFCO has established effective corporate governance in the organisation recognising the importance of the accountability and the transparency of the operations. Here high standards of corporate governance practice are held in order to ensure that the main aims and the objectives of the company are achieved by the organisation. It is believed that effective risk management is the main strategy that can provide growth in the sustainable operations especially in such a dynamic and changing environment (Cofco.com, 2015). Here a standardised and scientific approach is taken for achieving the operational and strategic objective. Emission reduction and energy conservations, environmental protection are the main initiatives that are taken by the company in order to promote sustainable development. The company has been recognised for its outstanding performance in 3 aspects of the sustainable development which are corporate governance, social responsibility and environmental protection.

There are various measures taken by Apple as well in order to achieve the sustainability in the industry. The corporation takes into consideration the impact of the production process on the stakeholders and thus it has taken measures in order to gain economic and social sustainability. Corporate governance is important for the organisation as well. Apple has continuously participated in the multi-stakeholder program for the benefits of the stakeholders. IDH Sustainable Trade Initiative association has supported the programme and they have also collaborated with various companies for strengthening the system. The organisation continues to work with the government agencies, trade groups, and NGOs for the economic and social sustainability (Supplier Responsibility 2014 Progress Report, 2014). They are involved in ethical sourcing and they have taken measures to reduce the environmental depletion or to reduce the climate pollution. There are various community-based solutions that are taken by the organisation. The auditors also take into account the sustainability issue into account.

The supply chain and logistics is one of the most critical functions of the operations of an organisation. In case of a global organisation the supply chain management can be more complex compared to local organisations (Chopra & Meindl, 2007). It is evident that the supply chain and the logistics model are very important for the growth and benefit of the organisation. Here the effective supply chain and logistics models for the two companies can be discussed as well.

In case of COFCO, the company undertakes various strategies so that the supply chain of the company can be more effective than the competitors in the market. It is known that, COFCO has specialised in the modern supply chain of food. There are various supply chain services that are provided by the company like distribution, warehousing, and various value-added services. They are involved in domestic food supply chain and logistics (Cofco.com, 2015). The Keystone Company of the US and the company have been involved in a joint venture and together they have implemented leading food supply chain management techniques, methods and concepts in the world that improves the capabilities in terms of integrated service like value-added service, distribution, transportation, and warehouse management.

The supply chain and logistics of Apple is one of the best in the world and it has contributed the company is becoming one of the fastest growing companies in the world with a greater profit level. They provide innovative and technologically advanced products to the consumers and its fascinating supply chain has also helped in delivering the products to the consumers on time. Apple gains the price advantage from the suppliers as it has certain degree of bargaining power in the market (Robertson, 2014). It us known that the operations of the company is extended throughout the world and there are suppliers of required products all over the world and they supply the products on time. The distribution channels of Apple are also effective and the distribution channels are present in almost every country. Thus the supply chain and the logistics of the company are very effective and it has helped in gaining competitive advantage in the industry (Yoni Heisler and Bob Ferrari, 2013).

References

BBC News,. (2014). Apple in conflict mineral crackdown. Retrieved 7 January 2015.

Chopra, S., & Meindl, P. (2007). Supply chain management. Upper Saddle River, N.J.: Pearson Prentice Hall.

Cofco.com,. (2015). COFCO (Shenzhen) Co., Ltd. – China Foods – Subsidiary unit – Discover COFCO – About COFCO – COFCO Limited.

Excellent food chain, quality products. (2010) (1st ed.).

Investor.apple.com,. (2014). Apple Inc. – Annual Report. Retrieved 6 January 2015.

Robertson, A. (2014). Apple Assesses Supply Chain For Conflict Free Minerals. Forbes. Retrieved 6 January 2015.

Supplier Responsibility 2014 Progress Report. (2014) (1st ed.).

Yoni Heisler and Bob Ferrari, S. (2013). The Logistics Behind Transporting Millions of iPhones from China to Stores Worldwide – Supply Chain 24/7. Supplychain247.com. Retrieved 7 January 2015.