Radio Frequency Identification (RFID) And Supply Chain Management Of Apple Inc Essay

Apple Inc

Introduction
For a smooth operation of company’s activities, it is important to manage and maintain the supply chain process. The efficiency of the supply chain model in accompany is, therefore, crucial to its working towards meeting customer needs. Companies may also choose the green supply chain management (GSCM) in the buying, manufacturing, distribution and logistics management. Believed to have the best supply chain model globally, Apple Inc face challenges with its model affecting its daily operations. This research analyzes the problems, and their solutions using the IT innovations such as SCM that makes supply chain management easier. The paper is also aimed at investigating the reputation of the company in relation to environmental conservation and its relationship with the suppliers.

Environmental Reputation of Apple Inc

Over the years, the company has been recognized for exceptional practices in environmental conservation through the use of GSCM. The company has been attacked by NGOs since it began the GSCM in 2003 due to attacks from NGOs. The attacks and ridicules are based on the company’s failure to provide comprehensive reports on the effect of its innovations in the environment. The NGOs claimed that the enterprise is responsible for the release of toxic gases and heavy metals to the atmosphere thus exposing people to health complications. In support of this, figure 1 describes the company’s stand on disclosing information on the environmental impact of its products.
Figure 1
In response to the criticism by the NGOs, the company published a report on the environmental issues in 2007. The report contained the details of the environmental data, goals, and achievements in promoting a clean environment. The report pledged to improve some of its practices including product design, use of renewable energy, supplier accountability, recycling and reduction of toxic elements in the products. The company also conducted audits on its suppliers to ensure that they complied with the global environmental regulations. Figure 2 illustrates this.
The company as ahead various advantages over its competitors due to its innovative program of Apple Recycling Program that appeals to customers as illustrated in Figure 3

Challenges faced in supply chain management

Apple Inc uses various modules in its supply chain management such as the ERP and the MIS systems, but they are not efficient especially in the identification of new products. This may lead to inefficiency since all the products must be identified so as to obtain a smooth flow of inventories. The company has been able to solve this by using RFID system that helps in tracking the products and solving the identification problem. The system is also useful for tracking the company’s logistics and other inventories which are also necessary for maintaining the supply chain. Apart from the product tracking problems faced by the company, there are also other challenges such as the costly and time-consuming supply chain system and calculation of inventory. In addition, the company faces a challenge in the development of new products using the technology.

Apple’s relationship with the suppliers

The company is keen on management of suppliers since it recognizes their impact on the success of the business. Its good supplier management is evident from the way it has been leading in the industry in the last four years. One of the strategies that have been vital to the company’s supply management is the reduction in the number of suppliers. The company has also initiated measures that make its supply chain more transparent. The company benefits from huge discounts from the suppliers due to its volume of purchases, financial power and the brand power. Apple collaborates with its suppliers in terms of capital investments. The company benefits many suppliers whose major revenue base is sourced from Apple. Figure 4 illustrates the companies that depend on Apple for revenue.
The company conducts audit on the suppliers in order to ensure that they only engage in activities that promote high standards of output. This is part of the company’s monitoring and controlling efforts aimed at ensuring that the reputation of the company is not affected and that the supply chain operates smoothly. Despite the gains that the company gets from the suppliers, it faces various challenges that make the business risky. One of the major supplier-related challenge is the over-reliance on a few suppliers. Any change in the supplier’s environment such as reduction of material may lead to huge losses for Apple Inc.

Apple Inc. Current RFID system

One of the major developments that the company has embraced is the radio frequency identification system (RFIS) that has helped it expand its business worldwide. The technology is very efficient since it uses electromagnetic fields to transmit data wirelessly. Apple’s major specialty is the production of gadgets where in the recent days it has begun embedding the RFID in the production of the devices. There are various types of RFID technology that a firm may choose from. For Apple Inc, the most appealing type is the near field communication (NFC) that has been used in the production of iPhone 6 and iPhone 6+.
The users of these gadgets enjoy some services that the users of common smart phones cannot access such as some aspects of social networking and making payments. The user can use their iPhone gadgets due to the link between their MasterCard and the application. Such users are required to hold their gadgets to a wireless reader and with their finger pressing the devices touch ID; they can make their payments. Once the payment is made, the user of the iPhone is notified through a vibration message.

Advantages of RFID

The process helps in automatic scanning of no sight products which are not found in the inventory checker.
It reduces labor costs to the company.
Helps in tracking the inventory that is returned to the company as well as the damaged items in asset calculation.
The technology enables automatic calculation of the inventories thus saving the resources used such as time.
The inbuilt chips in the system help in the improvement of inventory security.
Disadvantages of RFID
The system is difficult to use especially for new users.
It increases the operation costs of the company through training of foreign employees.
It requires time, and huge capital investment since the system is costly.
Radio Frequency Identification
Apple Inc uses the most advanced technology in frequency identification relative to the ones used by the rival companies. The radio frequency identification technology is difficult to use since it is very technical especially for new users but despite the drawback it is quite dominating in the market. Apart from the complexity in use of the technology, it also has other disadvantages such as the additional cost of external buying peripherals. Its advanced and enriched process makes the products complex to use thus requiring the company to come up with user-friendly products.

Use of RFID in supply chain management

The processes involved in the smooth flow of goods from the manufacturers to the target market are concerned with supply chain management. The supply chain management in Apple Inc is not only useful for ensuring that goods reach the market, but it also involves the marketing decisions undertaken by the company. The use of RFID in supply chain management helps in reduction of errors thus improving the efficiency and reliability of the system. The RFID also helps in understanding the entire manufacturing process.

Recommendations

It is recommended that Apple Inc uses the RFID technology due to the benefits attached to the system that will eventually aid in the company’s efficiency. In addition, the quality and control of the inventory is better improved through the system. Hence, in order for the company to improve its supply chain management, it needs to adapt the RFID technology. Regarding the company’s supply chain management, it is important that it increases the number of suppliers so as to reduce the risk of overlying on a few sources. The company needs to be flexible in order to maintain a competitive advantage in the market.

Conclusion

The use of GSCNM by companies is very important especially with the ever-growing rate of environmental degradation. The use of GSCM saves resources, improves productivity and eliminates waste. A sound supply chain management improves the efficiency of the flow of goods to the target market and improves the quality of products. This makes the use of technology in the SCM very important such as the adoption of RFID system. The reduction in the number of suppliers by the company has been effective in optimization of supplier management but this can also have adverse effects on the company in cases where the suppliers face challenges such as shortage of the supply.