Analyzing Efficiency And Strategies In Apple's Transportation Management Essay.

Background on Apple

Question:

Discuss about the Transportation Management of Apple.

Transportation is considered as the important part of every organization. The movement of goods, animals, and people from one place to another is known as Transportation. Road, cable, rail, and air are the modes of transport (Robinson, 2013). The report is about transportation management of Apple. The key agenda of this report is to analyze the efficiency of three features of transportation management namely incoterms selection consideration, carrier selection criteria, and carrier relationship management.

Apple is situated in America, it is a technological multinational company. In Cupertino of California headquarter of Apple is established and its central aim is to grow and provide computer software, consumer electronics, and online services. It is known that Apple Company is the world largest information technology in terms of income and it has the position of world’s second largest company in terms of mobile phone manufacturer after Samsung. The objective of Apple is to provide new and innovative products to their customers that enhances the customer satisfaction. Apple has brand loyalty and apple customers’ have earned a status of loyalty. It has been recognized that in the world there are two sets of people, one set of people say that Apple is not just a company it is a cause and another set of people say that Apple is not the cause it is just a company (Koegler, et. al., 2013). In many countries, Apple operates its retail stores, online stores, and iTunes store.  Apple sells its product to small and mid-size businesses, government customers, consumers. iPhone is the product line of the Apple smartphone with IOS operating system. Apple pay and Siri are the services provided by iPhone to their customers. The competitors of Apple are Lenovo, Dell, and HP.  The vision of Apple is to provide the computing understanding to its buyers and inspire professionalism all around the world by inventing software, hardware and online assistance and the mission of Apple is to confirm the highest standards of social responsibility. 

International Chamber of Commerce (ICC) is the one who published the trade term i.e. Incoterms, they are used commonly in the trade contracts of national and international. International trade becomes easier by using Incoterms as it helps traders present in different countries to understand each other. It is very important for all the traders to choose incoterms for the transactions in which he/she wants to involve. Incoterms are known internationally and cease the confusion in contracts of foreign trade by guiding buyers and seller understand their duties in transactions. There are 11 common terms. It includes information about the place and time of delivery, payment risk due to missed shifts from seller to buyer and it also maintain the information of those who pay the amount of insurance and transport. Transportation facility of Apple is very effective. The first category is EXW, the Incoterms in which Apple (seller) is liable only for placing the goods available at the chosen location by Apple for the buyer to pick the good from selected transportation carrier (Miller & Saldanha, 2016). After placing the goods at the chosen location Apple does not have any responsibility, all risk and cost of transportation are shifted to the buyer. 

The Importance of Incoterms in International Trade

CIF stands for carriage, insurance, and freight, in this term duty of Apple (seller) is to assemble and pay the transportation of goods and insurance of shipping through the named ocean. In the term CIF, terminal handling charges of apple that are involved in the merchandise tariffs by the transporter. The purchaser of the Apple product must inquire about whether THS is involved in CIF or not.

DAT stands for Delivered at terminal that means delivery of Apple products once delivered through the transportation mode, is sited at the buyer’s name at a nominated terminal. Terminal denotes a place like container yard, road, warehouse, air cargo terminal, and rail.

DAP stands for Delivered at place which means that Apple is responsible for delivering the product to the location decided from where the buyer can receive the products.

FOB stands for Free on board in which Apple (seller) is liable to organize the conveyance for goods to a vessel chosen by the buyer at the nominated port of shipment that reflects that the Apple product has been forwarded. The risk of the Apple’s product is transferred to the purchaser if good is not founded in the vessel and buyer will be liable to bear all the cost (ACT Logistics. 2017).  

In the commercial transaction of Apple when anything goes wrong then incoterms help and identify the responsible person between exporter and importer. The issues between two parties are resolved by incoterms that disturb the transaction. The transaction of buying and selling that takes place in Apple Company is considered as a contract. The contract involves all the information of the parties and their accountability towards its risk, cost with their duties that can make the situation difficult while taking the decision about the accountability of the goods. It is not important but it is common as it explains the standards and the terms used by both the parties. Documentary procedures, distribution costs, and transmission risk are included in this (Graham, 2013).

The chosen term of Incoterm, seller and buyer do not pay attention that there is a requirement of the content in the contract of sales and condition of the terms must be similar (Malfliet, 2011). Apple Company will receive help from the recommendations provided by these Incoterms for decreasing the potential risk. In Apple, Company incoterms perform an important role in confirming whether the international trade is completed in a standardized way or not. FOB is the term recommended to Apple Company as it allows high control on the cost of freight and freight itself. CIF is the term of incoterm in which risk is shifted to the buyer, therefore, it is recommended to Apple Company. DAT and DAP both are different from each other, DAT has been recommended to Apple Company as at the time when a product is delivered by Apple and dropped from the arriving mode of transport, is protected with the buyer’s name. It helps the company in reducing the risk and enhancing the competitive advantages. DAP and CIF are different from each other but both help Apple Company in shifting the risk to the buyer at the place where goods are delivered. In the term of DAP responsibility of buyer is to pay the clearance cost and custom of import.

Efficiency of Incoterms Selection, Carrier Selection Criteria, and Carrier Relationship Management at Apple

The process of explaining policies of future, goals, and investments to get ready for additional needs to move product and people to endpoints is known as Transportation planning. Transportation project viability is discussed as progress planning and local engineering. Apple is a program which is scheduled to inform local authorities about the process of project development and for helping them in decision making. The manufacturer who has shown effective shipment growth is Apple; international shipments from ASUS, Lenovo, Acer down and HP. Apple has made its place on the list of PC vendors worldwide. 

In the below image it can be seen that in the 2015 year during the fourth quarter, 5.7 million PCs were shipped by Apple for the market share of 7.5. One year ago Apple global shipment is 5.5 million PCs and with the market share of 6.7 percent. Overall year growth of Apple is 2.8 percent.

Transportation of Apple Company is perfect. They deliver their products timely. It is important for Apple to keep secrecy as their products are very advanced. Apple’s transportation goal is to build consistency ability. Consistency ability describes that Apple has dependable products and it has been checked by the manager of transportation due to his/her duty. The goal of transportation manager is to be careful about the goals of the company. Apple is the company who show the demo prior and launches its product in advance. Transportation manager should emphasis on all the related points regarding the privacy of the product (Choudhary & Shankar, 2014). Further, transportation manager of Apple Company should take care of the privacy of delivery point and should not be exposed. For every company contract security is important. The information of contracts of Apple Company with other company should be kept secret and its secrecy should be ensured by the transportation manager. Quality of Apple product is very high with the high cost so that is why transportation manager should keep the high security of the products while exporting. Courier team, packaging teams, and verification team is maintained by Apple Company so that products could not be damaged. Apple Company should ask their employees to sign the agreement of non-disclosure so that private facts could not be revealed (Ennio, 2013).

Apple believes in the modification, change and when it makes a innovative change in its designs and products, for the security of the process engineers inspects the process, environmental and health risks.  Risk mitigation plan is designed at the time when risk is identified by partnering with the engineering team (Gustin, 2013). One of the features of Apple Company is to conduct the online verifications, safety tests, and technical training after producing new products, to confirm whether the new products can be produced safely or not. To protect importers and exporters of the Apple product from uncertainties and disturbances a backup plan and emergency plan is formed (Rushton, et. al., 2014). The Apple Company is focused on definite measures of legal and dues that have risen in the regular passage of business and it has not been completely judged (Farahani, et. al., 2014).

Transportation Goals and Strategies of Apple

It can be recommended that the Apple program should be framed effectively to provide clear information to the local authorities and can help them in decision making.  The goal of the organization should be the goal of their transportation manager and to achieve these goals manager should be very efficient and skilled. The secrecy of the Apple’s contract should be ensured by the transportation manager. 

Balance should be maintained by the team of effective carrier relationship by encouraging on behalf of transporters while filtering the conclusions of business for carrier partners. Without the support of carriers, Apple will not be able to provide services to their customers. A business that can offer facilities legally with the Apple products is known as Apple Authorized Service provider (Apple ASP) although the Apple products warranties are held by different entities. If the customer will avail the services other than authorized service provider than that provider will not provide warranty feature. The providers of Apple services have full status of ASP, which allows authorities to operate all the Apple products (Clover, 2016). For the Apple’s ASP program, business should be entitled to this program with a recognized reseller, service provider or educational institute in the area where there is the presence of Apple as well as their direct service provider. In that program of apple, an individual is not allowed to apply. Service providers should follow certain rules to generate audited financial records and have a credit line in according to the Apple local financial representatives. Apple Certified Macintosh Technicians should accomplish services for Apple products (Wuerthele, 2016).

It can be recommended that Apple Company should retain and manage their carriers as without their support Apple will not be able to entertain their customers. All the service providers of Apple should follow the program of ASP so that secrecy of the product innovation can be maintained. 

3PL known as third-party logistics in supply chain and logistics management in that company uses third-party business for outsourcing company's element for achieving the service accomplishment (Aguezzoul, 2014).

Companies like Deloitte and Apple have worked before. The practice of an Apple-centric is being increased by Deloitte that will have more than 5,000 strategic advisors. These advisors are known as the advisor who focuses on serving modifications in the business workflow in overall business, research and development, inventory management, back-end systems and customer-facing functions (Zhang & Fong, 2014). “Enterprise Next” is the program generated by Deloitte and Apple, to improve the process of issues resolution by fast technology. Deloitte is a company working with Apple and is known as the ideal partner as it provides advice to the Apple team to implement committed strategies. Partnership with Deloitte is helping Apple to increase their business and increase their capabilities (Morris, 2016).

Product Quality and Security in Apple's Transportation Management

Conclusion

In the conclusion, it can be said that transportation and distribution are very important for all business or organization. In this report Apple Company is chosen, it is the leading company in all over the world. The merchandises offered by Apple are the high range which increases the responsibilities of transportation manager. In this report, three sections are discussed Incoterms selection consideration, carrier selection criteria, and carrier relationship management. Incoterms are the terms of trade used in the contracts of business. Incoterms are used by Apple in its contract. Carrier selection criteria involve carrier selection, transportation planning such as consistency, product protection, availability of equipment and carrier freight of damaged products. For Apple Company carrier relationship management is very important.

References

ACT Logistics. (2017). Incoterms. Retrieved from: https://actlogisticsinc.com/incoterms/

Aguezzoul, A. (2014). Third-party logistics selection problem: A literature review on criteria and methods. Retrieved from: https://econpapers.repec.org/article/eeejomega/v_3a49_3ay_3a2014_3ai_3ac_3ap_3a69-78.htm

Choudhary, D., & Shankar, R. (2014). A goal programming model for joint decision making of inventory lot-size, supplier selection and carrier selection. Computers & Industrial Engineering, 71, 1-9.

Clover, J. (2016). Apple Maintains Mac Sales Momentum Amid Overall Worldwide PC Market Decline. Retrieved from: https://www.macrumors.com/2016/01/12/4q15-pc-sales/.

Ennio, C. (2013). Transportation Systems Engineering: Theory and Methods. Retrieved from: https://www.springer.com/cn/book/9781475768732

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